Buyers Favor Rate-Tied Notes Over Credit-Linked

Sales of structured notes tied to interest rate moves are surpassing those linked to credit risk for the first time in almost two years as investors seek to profit from rising rates.

Deutsche Bank AG and DZ Bank AG led sales of $4.74 billion of rate-tied notes in the third quarter through Sept. 18, exceeding $4.38 billion of credit-linked note issuance. That gap would be the largest favoring rate-tied securities for any three-month period since the fourth quarter of 2011, according to global data compiled by Bloomberg that excludes U.S. sales.

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