Semi FRNs likely to remain niche product despite issuance flurry

Demand for the recent burst of floating rate note (FRN) issuance from Australian semi-government borrowers appears to have come from a small group of investors, and market participants say widespread growth of the product seems unlikely. However, the states that have issued in floating format appreciate the opportunity to fund, and diversify funding sources, in a difficult market, adding that they are happy to consider its use in future.