BNP Paribas Fortis Funding (BP2F), the Luxembourg issuance vehicle owned by BNP Paribas Fortis (BNPPF), issued 60 securities worth €994.6m during 2016, up €366m compared with the €629 raised from 50 securities sold during 2015, according to the company's latest audited annual accounts. The figure, which includes sales to investors in Belgium and Luxembourg, can be split into structured products (index-linked notes and variable coupon notes) and non-structured products (fixed interest notes and floating rate notes) which sold €554.4m and €440.2m, respectively, according to a BNP Paribas Fortis spokesperson.
"BNP Paribas Fortis Funding is [a vehicle] used only for the issuance of securities which are almost exclusively issued for retail customers," the spokesperson said.
Sales for the 11 index-linked products, which included 10 products denominated in euro and one in US dollars, were €138.5m in 2016, up €107.8m year-on-year from €30.7m in the previous year, reported BP2F. The report also showed that 30 variable coupon notes sold €415.7m (2015: €307.1m) while 15 fixed interest rate notes, including offerings denominated in Australian dollars, Norwegian krone, New Zealand dollars and Turkish lira, sold €227.3m (2015: €172m). Sales of four floating rate notes, at €212.9m, were up €93.4m, from €119.5m in 2015.
At the same time 60 securities worth €1.8bn matured in 2016, according to BP2F. The maturing products included three index-linked products (€24.4m); 16 variable coupon notes (€313.2m); 20 fixed interest rate notes (€606.9m); 11 floating rate notes (€410.5m); eight subordinated notes (€485.7m) and one credit linked note (€8.9m).
BP2F reported the total balance sheet amounted to €4.5bn in the year ending December 31, 2016, compared to €5.3bn in 2015. The outstanding for index-linked notes stood at €321m (2015: €206.6m), credit-linked at €5.7m (2015: €14.6m) and other variable redemption notes at €37.6m (€74.6m).
The outstanding amount for subordinated notes (€448m), fixed interest rates notes (€1.4bn) and floating rate notes was lower compared to the previous year (2015: €936m, €1.6bn, and €480.5m, respectively) but assets for variable coupon notes, at €1.8bn increased by more than €100m (2015: €1.7m).
BP2F issued 39 structured notes worth €599m in Belgium in 2016, according to SRP data. Of these, the Euribor Capped & Floored Floater Note 2026 achieved the highest sales. The 10-year income product, which offers a quarterly variable coupon equal to the three-month euribor, collected €54.9m during its subscription period. The best-selling equity linked product was the Coupon Note Europe Select 2025/2 (€42.12m), a nine year fully capital protected income product which pays a yearly coupon equal to the annual performance of the Stoxx Europe Select 50 EUR index, subject to a maximum coupon of 4.5% per annum. BNPPF also issued 13 Class 23 life insurance products (€262m) in a joint venture with AG Insurance in 2016.
Within the framework of the funding operations, BP2F hedges with BNPPF or BNP Paribas Arbitrage 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 currently 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.
BP2F was incorporated on September 24, 1986 in Luxembourg as a public limited liability company with the name Genfinance Luxembourg, which was then changed on November 12, 2001 to Fortis Luxembourg Finance and on February 22, 2010 to BNP Paribas Fortis Funding that is today both the legal name and commercial name.
Click the link to view the full BP2F annual report 2016.
Related stories:
KBC remains top in stable Belgian market in 2016
Structured notes caught by Belgian regulator's 'unfair contract terms' framework
Flemish savings bank offers auto-switch on Natixis BeNe index
Belgian distributors increasingly turn to equities