Barclays Joins Credit Agricole Selling Ratchet Structured Notes

Barclays Plc (BARC) sold its largest structured note in five months as it joined Credit Agricole SA (ACA) in issuing securities that benefit when long-term interest rates increase.

Britain’s second-biggest bank by assets raised $82 million from 10-year ratchet notes in its biggest offering since May 28, according to data compiled by Bloomberg. Investors receive 6 percent in the first year, after which the coupon adjusts depending on changes in the 10-year swap rate.

Jodie Gray, a London-based spokeswoman for Barclays, declined to comment on the sale.

Ratchet notes allow investors to profit from moves in interest rate swaps, which measure the cost of exchanging fixed-rate interest payments for floating. The swaps reached a two-year high of 3.18 percent on Sept. 5 before dropping to 2.76 percent today, according to data compiled by Bloomberg.

Barclays issued $112 million of ratchet notes this month, the most since June 2010, data compiled by Bloomberg show. Credit Agricole sold $42 million after raising $235 million in September.

To contact the reporter on this story: Alastair Marsh in London at amarsh25@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.