Sales Surge of Notes That Shield From Rate Rises

Banks sold $548.3 million of U.S. structured notes in May that offer protection from rising interest rates, the most in almost two years, on concerns that borrowing costs may rise as the Federal Reserve prepares to reduce unprecedented stimulus measures.

The most popular such securities were those that eventually yield a coupon that floats above the London interbank offered rate, according to data compiled by Bloomberg. Sales also gained for notes that pay more when the difference increases between long and short-term rates.

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