ING Belgium International Finance, the issuance vehicle of ING Belgium for structured notes and warrants, has reported the outstanding volume for floating rate notes and fixed rates notes backed by an equity swap stood at €662.4m as of June 30, 2018, down from €706.7m end-December 2017. At €368.9m, volumes for floating rates notes and fixed rates notes backed by an interest rate swap also decreased (December 31, 2017: €373.6m), according to the company's interim results for 2018.
The volume of notes becoming due and payable within one year was €182.4m while another €848.9m had a maturity of more than one year. Interest expenses on non-convertible loans issued, current accounts and other derivatives was €13.5m at June 30, 2018, with €2,579 of commissions paid on those instruments.
Until early 2015, the company used to finance itself solely through the issuance of structured notes distributed mainly by the retail and private banking network of ING Belgium. However, ING decided to use another structure as from beginning of 2015 for the issuance of both structured notes and warrants, and the company is now in run-off. The outstanding structured notes and warrants will stay in circulation up to their redemption.
The company is currently only exposed to a counterparty risk on ING Belgium (as hedging counterpart and as borrower under the loans granted by the company), and on ING Bank NV Belgian Branch (as hedging counterpart).
Three hundred and ninety-six structured products issued via the ING Belgium International Finance vehicle are listed on the SRP database. Of these, 60 products, which sold €1.4bn at inception and with maturity dates of between February 2019 and December 2024, are still live. The live products were almost exclusively issued in Belgium, bar two products targeted at the Swiss market.
The majority of the outstanding products were linked to equities, with 32 products linked to a basket of 20 or more shares. A further nine products were linked to a single index including the Eurostoxx 50, Eurostoxx Select Dividend 30, Stoxx Europe 600 Oil & Gas and the Eurostoxx Banks. Eighteen products were linked to interest rates (Constant maturity swap rate, Euribor and Libor) and the remaining product was tied to the inflation.
Almost all notes were issued with a capital guarantee upon redemption, with ING Belgium acting as the guarantor. The product which achieved the highest sales were the US dollar denominated Magnet Performance Notes 01/21 which collected US$84m (€72m) in the subscription period.
All of the company's outstanding structured notes are expected to mature by mid-December 2022, with the bulk of the maturities, at a combined €503m from 13 products, taking place in 2021.
ING Belgium International Finance was incorporated on November 10, 1994, as a 'societe anonyme'. The purpose of the company is to grant loans to companies of ING Belgium group, refinanced by financial instruments such as public notes, private placements or bank loans.
Click the link to view the ING Belgium International Finance semi-annual accounts as of June 30, 2018.
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