KBC Ifima has topped the list of best-selling products in Belgium so far this year, attracting combined sales of €416m for three constant maturity swap (CMS)-linked notes.
The firm, KBC's international finance company, launched the Luxembourg-listed MTNs, which struck in April, May and August, with capital guaranteed by KBC Bank and offering annual coupons equal to the five-year CMS rate, floored at between 3% and 3.2%, and capped at 6%.
The 5Y EUR CMS Interest Linked Subordinated Note, which struck in April, is currently the best-selling product in Belgium with a sales volume of €185m while its follow-up which struck in May and attracted sales of €62.5m ranks number 17 in SRP's list of best-sellers. Last month's issue, non subordinated this time, was again a top seller, with sales of €168m, and has positioned itself at number two.
The product is ideally suited to Belgian investors, said Alexander Lehmann, head of institutional sales at KBC Ifima.
"These products reconfirm the same underlying trend - even in a seasonally quiet market - that clients like to play the carry offered by the minimum floor of 3% in the five-year area," he told SRP. "At the same time, there is the promise of some upside through 100% five-year CMS participation even though break-even levels might take some business cycles to materialise," he added.
According to Lehmann, retail investors don't like to lock themselves in on plain vanilla fixed rate issues, "...unless there is, in their view, the right credit spread such as on high yield corporate credits," he said.
The other products that make up the top 20 - all linked to equities - are from the following providers: KBC Bank (seven products worth a combined €673m), ING Belgium (five/€378m), BNP Paribas Fortis Funding (two/€127m), Argenta (one/€70m), Bank van de Post (one/€55m) and ING Luxembourg (one/€50m).
These products are available on the Belgian database.