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| David Crammond |
Rule changes across Asia, but most importantly in Taiwan and Thailand, have continued to feed the collateralized debt obligation boom by allowing more investors to purchase the deals. "The number one thing this has done is opened the door for new business in so many new markets," said David Crammond, Asia-Pacific head of structured credit sales at ABN AMRO in Singapore. Nitin Nath, in the relative value group at Deutsche Bank in Singapore, "There's clearly been a process of allowing more investors to access CDOs." In Taiwan, insurers have received the go-ahead to invest in CDOs as a way to pick up yield for their asset portfolios (DW, 6/13). "This opened up the market quite a lot," said Shazhad Malik, senior credit structurer at BNP Paribas in Singapore. After the regulatory changes a flurry of deals hit the market, primarily CDO referenced to asset-backed securities. Crammond said, "This was the biggest event in Taiwan in terms of credit this year without a doubt." The pipeline of CDO deals in Taiwan will carry well into the new year, according to Malik. "Insurance companies are still chasing yield and there are no other real alternatives," he noted.
In Southeast Asia, Thailand's central bank announced domestic banks can purchase CDO tranches rated BBB or higher (DW, 10/29). Market officials expect domestic banks to close the first transactions shortly. "This process is well underway" said Nath.
As for next year, dealers expect the Indian market to open. "It's been a regional trend. Market participants in India are looking at this very seriously as well," said Nath.
