Dutch Bank Uses I-Rate, FX Swaps For MTN Program
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Dutch Bank Uses I-Rate, FX Swaps For MTN Program

SNS Bank, the banking arm of banking and insurance company SNS Reaal Group, plans to enter interest-rate swaps and possibly foreign exchange swaps on approximately EUR1 billion (USD966 million) of medium-term notes by year-end. SNS issues approximately EUR6 billion of debt per year, 35-50% of which is issued through MTNs, said Bart Toering, head of capital markets in Amsterdam.

The MTN program is divided evenly between structured MTNs, which the bank always converts from fixed-rate to floating with interest-rate swaps, and plain-vanilla MTNs. Toering said the bank issues in all currencies, depending on demand for the securities, and uses foreign exchange swaps to convert the proceeds into euros. It converts the risk because it lends its mortgages in euros.

Counterparties for previous swaps and medium-term notes include JPMorgan, Deutsche Bank, UBS Warburg, Credit Suisse First Boston, Westdeutsche Landesbank, ABN AMRO and Société Générale.

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