US structured bonds forecast at $300 billion... Nomura warns of hedging burden

Nomura Holdings global head of equity structured products Alex Micalizzi said on Bloomberg's "Odd Lots" podcast that U.S. SEC-registered structured note sales could reach roughly $300 billion in 2026, up from about $200 billion last year. He warned that shrinking demand for purchased options—as large buyers who had driven up option premiums exit and defensive call-option portfolios are cut or reshuffled—could increase hedging burdens on bank dealers in both falling and rebounding markets. The dynamic matters because dealers must hedge their structured note exposure through options, so thinner customer option flow can amplify their positioning needs during volatility. Investors should watch whether option premium demand keeps fading and how dealers adjust hedges as structured note issuance scales toward the $300 billion mark.