Tradition Financial Services (TFS) has become the latest inter-broker to enter the property derivatives fray.A subsidiary of Lausanne-based Compagnie Financière Tradition, TFS joins rivals GFI and Icap in offering dealer clients the ability to trade contracts that swap libor with a commercial property return. So far, the property return has been based on the All-Property Index, compiled by the Investment Property Databank in London.
Investment banks have been publicising swap deals in recent months as they have offered end-users, such as property investment managers and property developers, the ability to synthetically take or hedge exposure to the commercial property risk through these swaps (see ‘Sold on property derivatives?’, Risk August 2005).
Banks such as Deutsche Bank, Barclays Capital and Credit Suisse First Boston are gearing up to offer these swaps to end users.
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