The Canadian bank Scotiabank has sold $85m with its latest tranche of Callable Fixed Rate Notes linked to an interest rate.
The 12-year product offers a semi-annual fixed coupon of 4.3% pa throughout the investment period. The issuer has the option to terminate the product on the second anniversary of the structure. In the case of early termination or at maturity, the product repays the initial capital plus any unpaid coupons. The product charges an underwriting commission of 0.64% and is underwritten by Jefferies LLC.
The product comes on the heels of Federal Reserve chairman Ben Bernanke’s announcement of the reduction in the Fed’s quantitative easing programme to $75bn per month from its original level of $85bn and the expectation of a rise in interest rates.
With $472m across 64 products, Scotiabank held a 1% market share of US retail products in 2013. Interest rate-linked products fell by 18% in 2013.