IKB Deutsche Induestriebank is pitching the IKB Floater PLUS 10/2020 to German investors, a capital-protected bond which will pay a variable quarterly coupon linked to three-month Euribor. The investment is a response to “retail investor demand for real interest-yielding products in the recent, ultra-low interest rate environment”, said Jörn Schiemann (pictured), director, treasury at IKB.
The new product is part of the bank’s fixed-rate and step-up notes range denominated in euros and US dollars and complements its term deposits for private investors and senior unsecured bonds offering. “IKB [also] offers zero-coupon and inflation-linked bonds,” said Schiemann. “Moreover, in 2011 IKB extended its product range to broaden its funding basis by offering term deposits to private clients.”
The issued volume differs per bond, said Schiemann. Usually, IKB’s fixed-income products “with maturities of two to four years have the highest issuance volume,” he said. Since the bank’s first retail bonds in November 2012, IKB has issued bonds in excess of €600m, according to Schiemann.
IKB’s main focus remains fixed-income bonds with capital protection as opposed to structured products, said Schiemann. “Retail bonds are part of the bank's refinancing strategy, as they are typically buy-and-hold products,” said Schiemann.“With an efficient setup, IKB can pass on cost savings to the pricing of its bonds and offer higher coupons. Equity-linked structures are not part of this strategy, so IKB will not offer these products in the near future.”
In 2013, the Düsseldorf-based public company issued two other capital guaranteed products with floating coupons, according to SRP data.
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