Investors are starting to sell structured credit products, which they had purchased a few years ago, back to banks to monetize the spread tightening since they first took exposure to the instruments. End-users in Korea and Japan have been particular active in selling back collateralized debt obligation and first-to-default baskets, according to one credit head.
Marketers noted, however, that while interest has been apparent there won't likely be a rush from all clients in the region to sell-back existing trades. An official at Morgan Stanley said traditional accounts may be content to hang on till maturity. "Otherwise they would have to find somewhere else to park there money," said the official.
