Related News:
Raiffeisen Sells 200 Million Euros of Notes Linked to 10-Year Swaps Rate
Raiffeisen Zentralbank Oesterreich AG, Austria’s third-biggest lender, issued 200 million euros ($255 million) of 10-year notes linked to the euro swap rate.
The notes pay a coupon of 38 basis points more than 10-year swaps, according to data compiled by Bloomberg. The securities were sold by Vienna-based RZB and Banco Santander SA.
The euro 10-year swap rate, the cost to exchange fixed interest payments for floating rates, was 2.56 percent at 10 a.m. in London. The level dropped to 2.27 percent on Aug. 30, the lowest since the euro’s start in 1999.
RZB, rated A by Standard & Poor’s, is paying a premium on its notes compared with swap-linked securities issued in recent weeks by higher-rated banks. Paris-based Credit Agricole SA, ranked two levels above RZB at AA-, sold 10-year notes Aug. 17 that offered no spread over swaps. Australia & New Zealand Banking Group Ltd., graded AA, last month issued similar- maturity notes with no premium.
“This isn’t the usual size you see in the market right now, most deals are done in 50 million to 100 million euros maximum,” said Gonzalo Alvarez, a Madrid-based euro medium-term note trader at Banco Santander. RZB’s notes are one of the few 10-year deals in Europe paying a spread over swaps, he said.
RZB’s securities were sold at 100 percent of face value and in 50,000-euro increments.
Structured notes are bank-issued securities that combine bonds with derivatives, which are contracts whose value is derived from stocks, interest rates, currencies or commodities.
To contact the reporter on this story: Sarfraz Thind in London at Sthind3@bloomberg.net
Rate These Stories
Rate this Page