Barclays Plc (BARC) and Standard Chartered Plc (STAN) sold about $300 million of structured notes tied to the debt of South Korea after the nation had its rating raised on par with Japan and China by Moody’s Investors Service.
Barclays, the U.K.’s second-biggest lender by assets, issued two 10-year $100 million credit-linked notes Aug. 28 that pay an annual coupon of 4.65 percent, according to data compiled by Bloomberg. Standard Chartered also sold two 10-year notes, one for $52.78 million and another for $39.96 million.
Moody’s upgraded South Korea by one step on Aug. 27 to Aa3 citing strong “fiscal fundamentals” that have strengthened Asia’s fourth-largest economy’s resilience to domestic and external crises.
Jodie Gray, a spokeswoman for Barclays in London declined to comment on the bank’s issues. Jong Sun Kim, a Seoul-based spokesman at Standard Chartered, said the notes were issued from its branch in Singapore and were not predicated on South Korea’s upgrade.
Credit-linked notes, which are debt securities with embedded derivatives, offer higher yields and maturities that may not be available in the bond market. Investors suffer losses if there’s a default for either the bank issuing the note or the reference entity.
Banks sold $589.74 million of notes tied to South Korea’s debt this year, according to data compiled by Bloomberg. Russian government bonds are the most in demand for structured notes with sales tied to the debt of the world’s biggest energy exporter totaling $1.18 billion.
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