Credit - 2007-10-01

Bad luck, bad timing and bad bets ..

Extreme levels of volatility and parched liquidity have shaken up the global hedge fund industry. Nikki Marmery reports on the winners and losers in the summer's relentless ride


With the global primary markets almost grinding to a halt, this month we focus on a single deal: the $3 billion dual-tranche bond from US cable operator Comcast

Putting a price on subprime assets

Structured credit investors nursing losses from subprime-infected assets want better valuation models for illiquid securities such as MBS. But as Stewart Eisenhart reports, such solutions will be tricky to design and costly to implement

The psychology of it all

The events of the summer have ravaged investor confidence in high yield and leveraged loans. Tim Hall at Calyon looks at the effect of the credit meltdown on three constituencies of the market: investors, issuers and underwriters

Q&A - Rohan Douglas

The founder and CEO of Quantifi, the structured credit modelling and risk analysis firm, talks about the effects of the summer's volatility on the structured finance market, in particular how existing models have fared against the turmoil

Back to Basics

We take you back to the credit basics to review everything you thought you already knew but were too afraid to ask ... Mark Beeston, president of trade affirmation platform T-Zero, looks at novations

The contagion will spread

All eyes have been on the residential mortgage-backed sector but, as our new columnist points out, commercial real estate may be the next to provide some nasty surprises

Tim Fletcher

Insufficient data is at the root of the credit market's ruined summer, Baseline Capital's sales and marketing director tells Matthew Attwood

First Pacific Advisors - The waiting game pays off

Betting against the markets takes a steady nerve, but for Robert Rodriguez and Thomas Atteberry, investment managers at West Coast house First Pacific Advisors, the strategy has paid off - and how. Dalia Fahmy talks to the two men who run this year's…

Protected from the subprime chaos

The Latin American region has suffered its fair share of financial difficulties - most of them self-inflicted - but a period of economic stability and rebuilding has left many LatAm countries well equipped to withstand the fallout from the recent…

Stephen Andress

The head of derivatives ops at Northern Trust talks to Matthew Attwood about how credit derivatives are evolving and what effect the summer's turmoil may have on the industry

Legal Spotlight

Laws governing corporate insolvency and restructuring are failing to keep up with changes in the financial markets. Christopher Hall and Andrew Wilkinson argue that a programme of modernisation is needed

The true cost of no-cost mortgages

Banks offering no-cost mortgages have been accused of hiding the real cost of the loan from borrowers. But as Andrew Kalotay and Jinghua Qian explain, lenders can also run into problems if they fail to calculate correctly the prepayment behaviour of…

A time of strife

Interest rate markets traded as if every day was a big news day during August. Mark Walker of RBS Global Banking & Markets looks back at swap movements and volatility spikes and asks what those meant for mortgage lenders

Hedging for the duration

As spreads to be earned on other fixed income products have declined, mortgages have become more attractive but investors should know what risks are hedged and why. Mark Raaberg considers the main risk dynamics of hedging mortgages and why duration is a…

Mission critical

Few are the lucky ones in the current market turmoil. But good fortune and good foresight mean Freddie Mac is less vulnerable than private-label peers. The subprime mess might even present a valuable opportunity for the US mortgage agency. By Rob Mannix

Opportunity knocks

Property derivatives are already used in the commercial mortgage market, and growth is forecast in this area. However, there's untapped potential in the huge residential mortgage market - so what will it take for lenders to see the benefits of hedging…

An elegant charter

Patricia Cook has taken on the role of chief business officer at Freddie Mac as the mortgage agency faces its biggest challenge for the past 15 years, and perhaps its biggest opportunity. Here she talks exclusively about Freddie's strategy in the current…

Exit routes clear

Rob Collins has joined Morgan Stanley's securitisation team from his previous role as chief financial officer for the investment bank's UK mortgage lender - Advantage. His new role will help the firm feed capital markets intelligence into its product…

Running dry

The UK has seen an old-style bank run like those of the nineteenth century. German lenders have struggled to prop up failing conduits. Contagion from the US has reached Europe but not in the way anyone expected. Subprime lenders, in particular, have been…

The whole package

Whole loan trading in the UK is blossoming and healthy volumes are expected this year as a host of new entrants increase liquidity in the market. Though US subprime troubles have dented trading volumes, many expect the market to continue to grow. Hardeep…

Subprime hope

As the fallout from the troubled US subprime mortgage market continues to spread, Laurence Neville looks at what the future holds and examines some important factors that must be addressed to ensure its survival

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