ANZ is preparing to launch collateralized debt obligations referenced to the bank's balance sheet as spreads move tighter—a first for the bank. "We're seeing more demand coming in and feel this is a good time to hedge the books," said Greg Wakelin, credit structurer in Sydney.
With credit spreads tightening in after recent volatility, Wakelin noted the current levels make hedging more attractive. The Aussie bank is still in discussion stages with clients in regards to the final structures but the team is targeting closing the CDOs by September. The deals will likely be a combination of cash and synthetic portfolios in both U.S. and Australian dollars, but Wakelin said it was too early to comment on potential sizes.
The bank has been increasing its structuring presence in the last few years, creating product internally as well as partnering with international houses such as Calyon for credit-linked deals (DW, 12/2). "This is an indication that the market is maturing," said a credit head at a bulge bracket house, noting that domestic houses in Australia including Westpac and National Australia Bank are becoming more involved in the CDO space.
