LONDON -- Dutch bank ABN AMRO said on Monday it will launch a bond selling platform aimed at retail investors and two financing units of auto maker General Motors will be the first issuers.
ABN will sell the GM units' European SmartNotes to individual investors in the UK, Germany, Netherlands and Switzerland. The product is not available to investors in the United States where GMAC has a similar program which has raised over $29 billion so far. The European SmartNotes can be bought in increments of 1,000 euros, and are available to the general public on a weekly basis.
ABN AMRO said the volumes of the issues would be open and would depend on demand but declined to say how much it expected to raise.
When GMAC first started selling similar notes in the United States in 1996, it raised $77 million in the first year.
"We expect this product to be very popular with retail investors...but it does take some time to take off. There has been a lack of transparency and ease in fixed income investment," said Niall Cameron, global head of credit markets at ABN AMRO.
GMAC and GMACIF, will issue a three-year note with a coupon of 3.625 percent and a five-year note with a coupon of 4.25 percent in the first week, the bank said in a statement.
The notes are unsecured and are rated A3 by credit rating agency Moody's Investors Service and BBB by Standard & Poor's.
Cameron said he expected other issuers to distribute notes through ABN's new European Direct Access Notes program in the first half of the year.
"We think this will grow in Europe. We are fully confident that we will have other issuers in the program, both corporates and financials, and also some public sector issuers," he said.
ABN AMRO said it expected only small volumes of secondary trading in the notes but would ensure liquidity in the markets.
There are already two other similar corporate bond issue platforms targeting retail investors in Europe.
Deutsche Bank launched the COINS platform in November. The first issuers lined up in the programme were Deutsche Bank, Banca Intesa, Kreditanstalt fuer Wiederaufbau and Rabobank.
New issues in the COINS platform are also announced each Monday, and the price of a bond is constant over the course of the week. They are available in different maturities, currencies and structures.
Bank of America Corp. launched its Internotes platform in Europe last summer. It kicked off issuance with a sale by FCE Bank Plc, the European financing arm of Ford Motor Credit Corp.