Credit derivative product companies, AAA-rated special-purpose entities created to sell credit-default swap protection on single names and portfolio tranches, are gaining popularity, said Nancy Braun, director of financial products at BMO Capital Markets in Toronto. At least 15 CDPCs have submitted applications to ratings agencies and up to a dozen are expected to launch in the next year to 18 months. Only two exist so far: Primus, which launched in 2002, and Athilon, which launched in 2004. The majority appear to be following the latter's model of selling protection on tranches, rather than the former's of protecting single names.
Credit Derivatives Product Companies On The Up
