Credit Agricole Indosuez is launching the first credit-default swap index in Asia in the coming weeks and plans to market such structures as baskets linked to the product. "As we've been seeing more and more interest for credit derivatives in Asia, clients have wanted to benchmark the performance of their baskets or credit-linked notes," said Medes Ma, Asia credit trading manager in Hong Kong. Dubbed the CAI Asian Credit Index, it comprises 29 names from seven countries in non-Japan Asia and tracks their performance from Jan. 2. Five-year levels will be listed on credits from China, Hong Kong, Korea, Malaysia, Singapore, the Philippines and Thailand. The index, which will be listed on Indosuez's Bloomberg page, will be launched in the next few weeks, said Ma. He continued that sub-indices will be created in the near future, broken down by country.
"This provides a great snapshot of the market," said Pierre Trecourt, Asian head of credit derivatives structuring in Hong Kong. Ma added that by March the firm will market a default-swap basket based upon the indices as well as synthetic collateralized debt obligations that combine the credits from its Asian and European default-swap indexes.
Separately, CAI is preparing to market CDOs referenced to asset-backed securities in Asia. "We've seen at the end of 2002 a drive for investors to consider different collateral," said Loic Fery, executive director and head of global credit structuring at Indosuez in London. The CDOs will be structured on U.S. and European ABS for its clients in Asia.