CDPCs are arm’s-length vehicles structured to obtain a AAA-rating from agencies. They typically issue credit default swaps, or buy and sell structured financial products on behalf of investors.
Moody’s said about three quarters of the proposed companies were to be based in the US, with the remainder in Europe. Most of them plan to focus specifically on high-grade or mezzanine credit, while seven intend to trade along the entire credit spectrum. The majority of proposals eyed involvement in the corporate credit market, with significant numbers also looking to asset-backed securities or sovereign debt, among other asset classes. More than half of sponsors to the proposals were asset managers, but banks and insurance companies also featured, according to Moody’s.
The agency expects to rate several of the proposed CDPCs within the first quarter of 2007.
(See also: New CDPCs set for launch)