U.S. Commodity-Tied Note Sales Fall by 41%
U.S. sales of structured notes linked to commodities have plunged 41 percent this year, led by a drop-off in securities tied to copper, an industrial metal viewed as an economic barometer.
Issuance of commodity-linked notes fell to $2.04 billion during the first nine months, from $3.44 billion during the year-earlier period, according to data compiled by Bloomberg. Securities linked to copper accounted for $7.9 million of sales, down 97 percent from $261.6 million in the first three quarters of 2011.
Investors were concerned that the price of copper would slump with lowered growth forecasts for China, the world’s second largest economy and source of about 40 percent of demand for the metal, said Michael Gayed, chief investment strategist at Pension Partners LLC in New York. Copper inventories at bonded warehouses in Shanghai probably climbed to a record 650,000 metric tons last month, according to estimates compiled by Bloomberg.