BNP Paribas Fortis Funding, the Luxembourg issuance vehicle 99.9% owned by BNP Paribas Fortis, issued 23 securities worth €268m in the first half of 2017, according to the company's latest audited interim accounts. The figure, which includes sales to investors in Belgium and Luxembourg, can be split into structured products (index-linked and variable coupon notes) and non-structured products (floating-rate notes) which sold €174m and €94m, respectively.
Sales for the 14 index-linked products were €158.7m in the first half of 2017, according to the company. The report also showed that €16.2m was raised from the sale of four US dollar-denominated variable coupon notes and €93.5m from five floating-rate notes.
Over the same period, 37 securities worth €628m matured, according to the company. The maturing products included 12 index-linked products (€32.5m); 11 variable coupon notes (€128.7m); five fixed interest rate notes (€63.1m); five floating-rate notes (€194.4m); four subordinated notes (€200m) and two credit-linked notes (€5.7m).
The company reported its balance sheet at €4.1bn as at June 30, 2017, compared to €4.6bn at the end of 2016. The outstanding amount for subordinated notes (€246m), fixed interest rates notes (€1.3bn), floating-ratenotes (€183m), variable coupon notes (€1.7bn) and credit-linked notes (€0), were lower than at the end of last year (December 31, 2016: €448m, €1.4bn, €290m, €1.9bn and €5.7m, respectively), although assets based on index linked notes, at €445m, increased by almost 40% (December 31, 2016: €321m).
The company issued 19 structured notes worth €302m in Belgium between January 1 and June 30, 2017, up from the 20 products (€257m) that struck during the previous period, but a decrease compared to the same period last year (€342m from 19 products), according to SRP data.
Of these, the Euribor Capped & Floored Floater Note 2027 was the bestselling product. The 10-year income product, which offers a quarterly variable coupon equal to the three-month euribor plus 0.3%, collected €35.1m during its subscription period. The most popular equity-linked product was the Switch to Bond Note Deep Value 2026 (€22m), a nine-year, fully capital protected income product with 100% participation in the rise of the Dynamic Deep Value Equity Europe index.
Within the framework of the funding operations, the company uses BNP Paribas Fortis or BNP Paribas Arbitrage to hedge its exposures to various types of risks by using common OTC/derivatives instruments, such as swaps and options from the issue date or strike date of each funding operation. BNP Paribas Fortis Funding is only exposed to a counterparty risk on BNP Paribas Fortis (as hedging counterpart and as borrower under the loans granted by the company), and on BNP Paribas Arbitrage (as hedging counterpart), according to the report.
The company's main objective is to grant loans to BNP Paribas Fortis and the companies controlled by BNP Paribas Fortis. In order to implement its main object, the company issues bonds or similar securities, part of which are listed on the Luxembourg Stock Exchange, NYSE Euronext Amsterdam and NYSE Euronext Brussels. The debt securities are sold to investors all over the world, but mainly in Europe.
Click the link to view the full BP2F BNP Paribas Fortis Funding interim report 2017.
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