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Reseau Ferre de France Sells 100 Million-Euro Swap-Linked Note

French railroad operator Reseau Ferre de France sold 100 million euros ($131 million) of 20-year structured notes that pay returns linked to euro interest-rate swaps.

The notes pay investors a coupon of the 20-year constant- maturity swap rate plus 70 basis points with a maximum level of 7 percent, according to data compiled by Bloomberg. This rate is a benchmark that measures the cost of exchanging fixed and floating interest rates in the swap market.

RFF is the leading issuer of structured notes linked to CMS rates this year having also sold 200 million euros of securities in February, Bloomberg data show. The Paris-based corporate raised 200 million euros of CMS notes in the whole of 2011.

The rail network operator may issue more securities of this kind if there’s further demand from investors, said Emmanuel Candalh, head of financial market operations in Paris.

Structured notes linked to swaps allow investors to bet on the future direction of interest rates. The securities are bank- issued notes that combine bonds with derivatives, which are contracts whose value is linked to the price of stocks, interest rates, currencies or commodities.

To contact the reporter on this story: Alastair Marsh in London at

To contact the editor responsible for this story: Paul Armstrong at

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