
Merrill touts restructuring strategy
Merrill believes that if the BIS continues on its present course, significant impact on the market may result: first, long-term growth is likely as a result of new protection sellers being drawn into the market. Second, globalisation is likely as European and US contracts converge. Third, the market will expand for obligations that give the holder the right of veto over prospective restructuring, and finally, the balance of the conflict of interest of banks hedging with credit default swaps is likely to be altered.
Merrill said there is a likelihood that buyer-friendly restructuring events may effectively disappear, hence its recommendation to buy restructuring now. Alternatively, it suggests that investors might benefit from present circumstances by taking short positions in the credit default swap market or by buying negative basis bonds against default combinations.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact [email protected] to find out more.
You are currently unable to copy this content. Please contact [email protected] to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email [email protected]
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email [email protected]
More on Structured products
Regulation
What lies beneath: Nomura’s iceberg balance sheet
Collateral received by the Japanese bank exceeds its total on-balance-sheet assets – does it matter?
Receive this by email