Structured Notes Tied to Credit Indexes Surge Amid Low Defaults

Structured notes tied to credit-default swap indexes are selling at a record pace as the corporate failure rate declines in Europe.

Nordea Bank AB, SEB AB and Societe Generale SA led $1.7 billion of issuance this year, a 35 percent increase from all of 2012, according to data compiled by Bloomberg. Notes that speculate on the creditworthiness of the 50 junk-rated companies in the Markit iTraxx Crossover Index accounted for 60 percent of the sales, the data show.