Bets on for credit spread warrants
Dresdner Kleinwort Wasserstein has structured a credit spread warrant for French supermarket group Casino. Other dealers are eyeing a potentially lucrative market to help corporate treasuries lay off credit volatility risk.
Claiming a product is the closest thing to a ‘free lunch’ in the financial markets is bound to raise some eyebrows. But that is the language Dresdner Kleinwort Wasserstein (DrKW) is bandying about in connection with the new hedging strategy it has developed allowing corporates to monetise credit spread volatility.
DrKW launched the first credit spread warrant in May for triple-B rated French supermarket chain Casino. Credit derivatives experts believe similar deals may already have been
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