A structured note is a debt security that is issued by a financial institution on an underlying such as a single equity, equity indexes, a basket of stocks/ equities, commodities, interest rates, or currencies. A structured note has its performance linked to the return or rate attained by its underlying over the course of its term. A structured note is an over the counter (OTC) derivative with hybrid security features, where the payoffs from a number of assets (stocks, bonds, hybrids, etc.) are combined.
The most common examples of structured notes include:
A credit-linked note, for instance, has its payoff determined on the basis of credit payoff.
