Inflation Rekindles Niche Market for Duration-Proof Credit
- Union Investment wants more supply of floating-rate notes
- Citigroup strategists slash long-duration bond recommendation
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A corner of Europe’s credit market is luring investors as the threat of rising government yields fuels demand for assets that can protect bond holdings from the risk of interest-rate hikes.
Floating-rate notes, bonds with variable coupons as opposed to the fixed income attached to most debt, have seen a rise in issuance over the past month. The coupons are tied to market rates, so the debt’s underlying valuations are protected if monetary policies shift.