ABN Amro and Axa Investment Managers (Axa IM) have closed a principal-protected long/short credit note called Synergie, which has been sold to institutional investors in Europe, Asia and the Middle East.The notes were issued in euros and dollars with maturities of 10 and eight years, respectively, with the euro notes paying a contingent coupon of 50 basis points over Euribor and the dollar notes paying a contingent coupon of 100bp over Libor.
The notes will be managed by Axa IM, which will use credit default swaps (CDSs) and corporate cash bonds to take long and short positions. ABN Amro will use constant proportion portfolio insurance technology to guarantee investors’ principal at maturity.
“Synergie has been structured to give Axa Investment Managers the freedom to pursue outperformance through a diverse range of credit strategies,” said Richard Whittle, London-based global head of exotic credit derivatives at ABN Amro.
The ABN Amro issue follows the launch by BNP Paribas earlier this week of the second tranche of its Dynamo notes. The product, managed by Crédit Agricole Asset Management, employs a variety of long/short and relative value credit strategies. The first series of Dynamo was issued in July 2005 and attracted €525 million of investment. ABN Amro declined to mention the total level of investment in the Synergie notes.
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