The fledgling loan credit-default swap market is likely to pick up when the credit environment deteriorates, and more players will be interested in trading LCDS once it does. Mike Rosenberg, managing director at Polygon Investment Partners, said he doesn't doubt a change in the credit cycle will come about. "But we're not there yet," he added.
Growth in LCDS has trailed synthetic asset-backed securities because more players have views on housing than on loans. Chris Ricciardi, president and ceo of Cohen & Co., said growth of synthetic ABS was driven primarily by macro hedge funds betting against the housing market.
