Société Générale Asia has started offering coupon-guaranteed first-to-default hybrid notes in Hong Kong. "With spreads so tight, we wanted to offer something more attractive," said Francois de Supervielle, v.p. in the structured derivatives department in Hong Kong. The products dubbed "Summer Hybrid Notes" combine a first-to-default basket with a guaranteed coupon and a corridor interest-rate option linked to dollar LIBOR.
Typical sizes for the three-year notes will range from USD5-10 million and be referenced to baskets of around four to eight BBB or higher credits.
Separately, SG is joining the growing ranks of firms in the region marketing synthetic collateralized debt obligations referenced to asset-backed securities. De Supervielle said that SG is speaking with customers about the product and should complete its first transaction in the coming months. "Our counterparties want to include Asian exposure," he said, noting that regional clients are looking to include less-liquid Asian ABS in addition to U.S. and European underlying securities. Deal sizes will likely be USD500 million or greater. Rivals firms including BNP Paribas and JPMorgan have also been looking to close ABS CDO transactions in Asia (DW, 5/11).
