Merrill Lynch Launches First Temperature-Linked Certificate

LONDON,— Merrill Lynch today announced the launch of a new two-year euro-denominated certificate that offers an annual return based upon the average temperature in Roma-Ciampino, Italy. The investment product is 100 percent principal-protected and offers a temperature-contingent coupon of up to 16 percent annually. The certificate will be issued as part of the Merrill Lynch Certificate Programme and will be publicly offered into the Italian region via an appointed distributor.

Fine temperatures at the Rome Ciampino Airport

Andrea Podesta, managing director and head of EMEA Debt Wholesale Distribution at Merrill Lynch, said, “The launch of this new certificate is a first for the retail market. It reaffirms our commitment to providing leading tailored innovative solutions and products to our clients as well as strengthening our position as a global leader in the weather risk management market.”

Merrill Lynch, through its global commodities group, has been a market leader in weather derivatives trading since 1997 and is involved in approximately 20 percent of all global over-the-counter transactions.

Jens Boening, head of EMEA Weather Derivatives Structuring, Merrill Lynch, said: “This innovative product takes the weather risk market to the next level and enables investors to get easy access to this alternative ’asset class.’ At the same time it enables agricultural, commercial and retail clients in Italy, who have recently suffered from rising temperatures, to mitigate the risk of above average heat.”