Belgian investors continued to show a strong appetite for interest-linked products in Q3 2023.
An estimated €270m (US$289m) was collected from 13 structured products that struck on the Belgian primary market during the third quarter of 2023, according to SRP data (Q3 2022: €355m from 21 products).
Some 86% of all sales volumes were invested in products linked to interest rates, whose market share increased by 48.5 percentage points compared to the previous quarter and by 19 percentage points year-on-year (YoY).
The remaining 14% was tied into products linked to a single equity index (Q3 2022: 20%).
Ten interest-linked products were available to Belgian investors during Q3 2023. Of these, three were issued on the paper of BNP Paribas; two each were manufactured by Deutsche Bank, Goldman Sachs, and Morgan Stanley; and one was issued via Natixis.
The latter, Natixis (FR) Fixed to Floating CMS Linked Coupon 2029, was also the highest seller, collecting €128m during its subscription period in July.
The six-year product pays a fixed annual coupon of 4.10% for the first three-years of investment. The following years, the annual coupon is equal to two times the difference between the 30-year EUR constant maturity swap (CMS) rate and the two-year EUR CMS rate, subject to a minimum coupon of two percent pa and a maximum coupon of five percent pa. It was distributed via the branch networks of Crelan and AXA Bank Belgium – their fourth CMS-linked structure since the end of 2022.
Five of the interest-linked products issued in Q3 had a callable option, with a further two adding a target return. The last two were issued via Morgan Stanley in collaboration with Deutsche Bank. Both were linked to the CMS rate, and they redeem early if the sum of the annual coupons reach or exceed a predetermined target.
The three products on a single equity index all came from Belfius. They sold a combined €37m and were linked to the Eurostoxx Select Dividend 30, Stoxx Europe 600 Health Care, and S&P 500, respectively.
Products linked to a basket of shares, which achieved considerable market share in recent quarters – including a high of 58% during Q4 2022 – were not issued this time around.