Goldman Joins Barclays, Citigroup on Spire Debt PlatformBy
Low rates fueling investor demand for structured securities
More than 700 million euros of notes issued since May 2017
The New York-based bank will offer clients so-called repack bonds issued through a Luxembourg-based special purpose vehicle known as the Single Platform Investment Repackaging Entity SA, or Spire, according to a statement. The structured securities allow buyers to alter parts of the profiles of underlying bonds, such as turning floating coupon payments into fixed ones, or switching returns into other currencies.
The platform reflects how investors have embraced the idea of complex products becoming more standardized. Pension-fund and insurer appetite are fueling demand for structured securities as interest rates remain relatively low in Europe, a major center for trading repack bonds.
Repack volumes accounted for 32 percent of all structured note issuance last year, according to data compiled by Credit Suisse Group AG. Issuance totaled $33 billion in 2017, a decrease of 28 percent from the previous year.
BNP Paribas SA and Credit Suisse Group established Spire with Citigroup and JPMorgan in May 2017. Since then, more than 700 million euros ($852 million) of notes have been issued. Barclays Plc joined the platform in February.