RBC prices first high coupon Sonia deal

By Tyler Davies
29 Jul 2020

Royal Bank of Canada (RBC) has become the first issuer to guard against negative rates in the sterling market by structuring a Sonia-linked senior deal with an artificially high coupon.

The Canadian bank sold a £500m ($654.05m) one-year floating rate note (FRN) at a spread of 20bp over Sonia on Tuesday.

FRNs would ordinarily be priced at or close to par and their coupons would be fixed in line the reoffer spread.

But RBC structured its deal ...

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