Morgan Stanley unit Cournot Capital is setting up Cournot Financial Products, a credit derivative product company. It will sell protection on highly rated tranches of corporate credit-default swaps, focusing on AAA tranches but with the ability to go higher or lower in the capital structure, according to Frank Iacono, ceo.
The unit is currently with the major rating agencies to obtain a triple A rating. It is also working with a number of potential counterparties to establish trading relationships.
Since joining in September, Iacono has added Joyce Frost as a senior v.p. in business development and Gaurav Rastogi as an associate in trading and structuring. Frost came out of retirement for the chance to work on the platform, while Rastogi is a newly minted MBA. Patrick Morris-Suzuki has also moved over from Morgan's quantitative group.
