U.S. Note Sales Fall Below Average as Rates Drop

Bank sales of structured notes in the U.S. fell below the year’s average in May, after excluding the largest deal since 2010, as record-low interest rates made it more difficult to create attractive products.

Banks issued $4.12 billion of the securities last month, though the total was skewed by UBS AG’s offering of a $946.2 million note that was the largest tied to equities in at least two years, according to data compiled by Bloomberg. After excluding that note, May sales of $3.16 billion trail the yearly average of $3.54 billion.

“Interest rates went to the basement,” which has made creating some new products “tougher,” Alexandre Ecot, a director at Societe Generale SA’s group that sells derivatives and structured notes, said in a telephone interview.

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