FRN issuance on the rise, as investors go on defensive
An increase in floating rate issuance may be the start of a prolonged trend, as investors look for protection against possible interest rate hikes
Issuance of floating rate notes (FRNs) has increased in recent weeks in Europe and the US, with borrowers meeting growing demand from investors for instruments that mitigate interest rate risk.
“For the last four to six weeks we have seen quite a strong bid from investors for floating rate products,” says Damian Saunders, a member of the financial institutions debt syndicate team at BNP Paribas in London. “It is only a recent shift. We have had three or four deals now on the three-year part of
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