Credit derivative traders in Asia are eyeing a 10-year instrument for the nascent Dow Jones iTraxx Asia index this quarter. "When spreads are tight, dealers and investors search for yield and look for longer maturities. We're already seeing this progression in CDOs globally, where maturity is moving away from five years to seven or 10-year deals," said Terry Koh, credit derivatives trader at JPMorgan in Hong Kong.
Credit traders said market participants are planning to convene before the next roll on March 20 to discuss the new issuance and will likely agree to launch a 10-year contract. "I'm all for it," said another credit trader at a bugle bracket house.
