Marex today announces that its structured products business Marex Financial Products issued its first structured ‘cash-and-carry’ note linked to cobalt.
This innovative ‘cash-and-carry’ product was executed thanks to Marex’s ability to access physical cobalt in the spot market, hold it, and simultaneously sell cobalt futures on the Chicago Mercantile Exchange. The derived value was packaged into a structured investable product with a guaranteed coupon over a fixed tenor.
Historically the cobalt futures market has traded in steep ‘contango’, where the futures price is significantly higher than both the spot price and the implied carry costs (storage, financing, and insurance costs). That’s because most cobalt consumers, such as electric vehicle (EV) makers, cannot easily hold the physical metal. They buy the physical metal to manufacture straight away and hedge their cobalt consumption price risk by holding long positions in cobalt futures.
Using the firm’s ability to hold physical cobalt, Marex Financial Products was able to package an attractive structured note that will benefit from the price difference between the spot and future in the form of a guaranteed coupon.
“This innovative structured note was manufactured to offer a compelling return for our client, thanks to Marex’s diversified capabilities across the firm, showcasing the enhanced value we can deliver through our interconnected platform, setting us apart in the industry.”Martin Kummer Executive Director, Marex Financial Products
Contact:
Emma Cormerais, Emma.Cormerais@marexsolutions.com
About Marex:
Marex Group plc (NASDAQ: MRX) is a diversified global financial services platform providing essential liquidity, market access and infrastructure services to clients across energy, commodities and financial markets. The Group provides comprehensive breadth and depth of coverage across four services: Clearing, Agency and Execution, Market Making and Hedging and Investment Solutions. It has a leading franchise in many major metals, energy and agricultural products, with access to 60 exchanges. The Group provides access to the world’s major commodity markets, covering a broad range of clients that include some of the largest commodity producers, consumers and traders, banks, hedge funds and asset managers. With more than 40 offices worldwide, the Group has over 2,400 employees across Europe, Asia and the Americas. For more information visit www.marex.com.
