'Toxic' by association

Some distributors in Asia are offering first-to-default retail credit notes that give sovereign exposure. But heavy mark-to-market losses and the use of collateralised debt obligations as underlying collateral in previous issues have left an indelible stain on the already damaged reputation of credit-linked notes. Matt Cameron reports

Prior to the collapse of global credit markets last year, credit-linked structured products represented only a modest slice of the average Asian retail investor's portfolio, with the bulk of products confined to Singapore and Hong Kong. In the aftermath of the crisis, credit-linked products are finding it even harder to attract retail investors' attention, and sales are almost non-existent in some markets, such as Malaysia.

However, some issuers and distributors are offering first-to-default (FTD

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