Barclays Joins Credit Agricole Selling Ratchet Structured Notes

Oct. 17 (Bloomberg) -- Barclays Plc sold its largest structured note in five months as it joined Credit Agricole SA 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