Societe Generale has launched two Sterling LIBOR trackers on the LSE that will enable investors to hedge the risk of rising interest rates though an easily accessible exchange traded product.
ST11 is linked directly to future interest rates for December 2011, while ST12 is linked to the future interest rates from December 2012.
The payout for both the December 2011 and the December 2012 expiry products simply equals the prevailing percentage level of three month Sterling LIBOR on the expiry date of the tracker multiplied by GBP100 (eg if three month Sterling LIBOR is at 1.5% the value will be 1.5% x GBP100 = GBP1.50), provided that the product has not expired early.
Prior to expiry, the tracker can be traded during normal business hours on the LSE, with pricing in line with market-based interest rate expectations.
