Dealers rush to redeem high-yielding structured notes

An estimated $60 billion of structured notes are at risk of being called before year-end

The plunge in US interest rates has prompted dealers to redeem huge amounts of high-yielding structured notes that were sold after the Federal Reserve began tightening monetary policy in 2016.

A Hong Kong-based trader at one bank estimates his employer has called “tens of billions” of dollars of such notes in the past three months, with more expected before the year-end. And with newly issued notes yielding 1–2% less than before, investors in the products – which are popular in Asia – are