Barclays Capital To Launch Agricultural Note In Late Feb

The note is scheduled to be launched in late February, company officials said Monday.

Barclays Capital says it is the first bank in the U.K. to offer a pure agriculture commodity note to the fund management market.

The GBP GSCI Agriculture Note offers investors access to agricultural commodities without having to buy the entire GSCI index and be exposed to the core energy and metals markets, Barclays said.

"The GSCI Agriculture sub index has been in steady decline since the 1970s," Barclays said. "A potential shift towards bio fuels, changes in subsidy structures and demographic changes in India and China mean that the decline could reverse."

Barclays adds investors in the note can diversify away from top performing equity-based commodity funds which have performed well since 2002, but might be reaching their peaks.

The note is a five-year product to be listed on the London Stock Exchange. The note offers 120% of the rise in the GSCI agriculture excess return index with 100% capital protection unless the index falls by 40%, from the initial starting level, and fails to recover to the initial starting level.

If the index has fallen by 40%, and remains lower at the product maturity than at the start of the product, the capital return will be reduced by the percentage amount that the index has fallen, Barclays said.