Structured products
Japan Credit Market Update: Spreads track equities on WorldCom fears
The cost of default protection on Japanese credits stabilised on Friday after Wednesday’s sharp widening caused by a $3.8 billion accounting scandal at US telecommunications group WorldCom, volatile equity markets and the steady strengthening of the yen…
Westpac considers cap guarantee funds
Australian bank Westpac plans to start launching capital guaranteed funds into the Australian market-place within the next 12 months, according to Stephen Eakin, head of equity derivatives at Westpac in Sydney.
Credit Congress 2002: Credit hedging by convertible hedge funds set to rise, says Goldman
The potential opportunities for convertible hedge fund arbitrage will see the market grow from $2 to $2.5 billion by the end of this year, according to Klaus Toft, an executive director in Goldman Sachs’ credit derivatives strategies group.
Basel II focus switches to securitisation after SME loan solution agreed
Experts working on the Basel II bank capital rules are focusing on the technically difficult issue of asset securitisation after agreeing a solution this month to the politically sensitive problem of how lending to small and medium-sized enterprises …
ABN Amro, Eureka Hedge Advisors to launch Asian hedge fund index
ABN Amro and Eureka Hedge Advisors, a hedge fund research and advisory service based in Hong Kong and Singapore, have launched a benchmark index for Asian hedge funds. The service is aimed at providing investors and fund managers with a means to compare…
US middle-market CLO business poised to rise, says Fitch
US middle-market collateralised loan obligation (CLO) issuance is set to rise, according to a new Fitch Ratings report. A middle-market company is classed as one with annual revenues of between $10 and 400 million.
UK central bank concerned by investor appetite for credit risk
The purchase of credit derivatives instruments by some institutional investors in their hunt for yield is a cause for concern, the Bank of England said in its latest Financial Stability Review, released today.
HVB in major hedge fund push
Germany’s HypoVereinsbank (HVB) is restructuring its hedge fund activities in an effort to step-up its global alternative investments business. The move is intended to capitalise on the boom in demand for alternative investments, such as hedge funds, in…
Rabobank sues RBC over Enron total return swap
Rabobank, the Dutch financial institution, has filed a lawsuit against Royal Bank of Canada (RBC) over a $517 million swap transaction that RBC entered into with Rabobank to hedge a loan the Canadian institution had made to a unit of now-defunct energy…
Risk contributor Blejer steps down as Argentine central bank governor
Mario Blejer, a former senior adviser to the International Monetary fund (IMF), has resigned as governor of the Argentine central bank. The move could prove to be a blow to Argentine president Eduardo Duhalde's efforts to restore the country's battered…
First Italian hedge fund to open in July
Kairos Partners will become the first hedge fund in Italy when it starts trading in July, after receiving approval from Banca d'Italia, the central Italian regulator, yesterday.
Partners aims to offer €500m exchangeable hedge fund bond
Partners Group, a $4 billion alternative asset manager headquartered in Switzerland, plans to launch a €500 million innovative exchangeable bond linked to a pool of hedge funds within the next few weeks.
Credit Markets Update: Telco spreads balloon following WorldCom fraud
The admission by US telco WorldCom of a multi-billion dollar accounting fraud late yesterday sent credit protection spreads ballooning as much as 100 basis points today in both the US and Europe. But markets settled down as the day progressed, traders…
Tools for the trade
Credit Risk
Hedge funds set to steal share from mutual funds in Asia, says Barclays’ Yang
Hedge funds – a once-shunned asset class in Asia – are likely to take market share away from traditional mutual funds, according to Angus Yang, director in the equity finance group at Barclays Capital in Tokyo.
Banks bid for Roman risk management
Comune di Roma – the City of Rome – is close to awarding a mandate for the risk management of its €6 billion of outstanding debt, said bankers involved in a beauty parade city authorities have been holding over recent weeks.
Investor demand for Asian hybrid products growing
Growing numbers of Asian investors are turning to structured credit products in order to benefit from enhanced yield in an environment of low interest rates and tightening credit spreads, says Patrick Kwan, director of debt capital markets and investment…
Merrill Lynch continues with forex hires
Merrill Lynch has continued its forex hiring spree with the hire of Rabobank’s former global forex head, Michele di Stefano.
France Telecom debt protection cost soars following downgrade
The cost of five-year credit protection on France Telecom debt widened by 100 basis points (bp) today as rating agency Moody’s cut its credit rating to one notch above 'junk'. Five-year credit default swaps were priced at 600/650bp in heavy trading.
Totem widens equity derivative valuation service
Totem Market Valuations, the London-based over-the-counter (OTC) derivatives valuation specialist, is to expand its service to include floored cliquet options this month.
FSA sets August date for sale of securitised derivatives to retail sector
The UK’s Financial Services Authority (FSA) today published details of the regulatory regime for securitised derivatives that will enable the products to be available in the UK to retail investors. The proposed listing and conduct of business rules for…