MTNs storm ahead as new structures find favour

CMS growth is not expected to continue at its previous pace, but the momentum generated by the high first coupons, and the continuing leverage effort of MTN houses has kept demand for structured MTNs flowing.

Investor diversification is set to widen further in the coming months.

Last year proved a watershed for the EuroMTN market. A €50 billion boom in demand for CMS-linked structured notes from European retail and institutional investors drove a seismic shift from granular private placements into syndicate-sized jumbo trades. In addition, there was a swing to euros away from the market’s former reliance on appetite in Japan and the rest of Asia for yen and dollar structures.

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