ABN Amro is launching its European Direct Access notes into the UK, allowing IFAs to buy global companies' original issue bonds on behalf of clients.
The notes, called EuroDANs, will be available at a fixed price throughout the year, offering investors a variety of coupon payments and maturities. Initially, they will have either three-year or five-year terms but ABN says both shorter and longer maturities are in the pipeline.
Payment schedules will vary, depending on whether investors want to be paid interest monthly, quarterly, semi-annually or annually.
The notes have been a huge success in the US under ABN subsidiary LaSalle Bank. The first issuer in Europe will be GMAC – which intends to issue sterling notes in the future – but ABN says other firms are primed to enter the market.
IFAs will only be able to buy the EuroDANs through banks such as Barclays Capital so adviser remuneration will vary. ABN says firms such as HSBC, ING and UBS all have plans for selling them to the intermediary marketplace.
LaSalle managing director Patrick Kelly says: “We are demystifying the bond process through this program. If Tesco could sell these bonds, it would.”
Hargreaves Lansdown head of research Mark Dampier says: “I do not think that many IFAs will be keen to put their client in one bond. Government bonds are one thing but corporate bonds? Look at what happened to Parmalat.”