UBS Global Asset Management (Australia), one of the largest asset managers in Australia with over AUD15.1 billion (USD8.13 billion) under management, is studying the possibility of using credit derivatives for the first time, according to Stuart Piper, head of fixed income in Sydney. It is considering selling protection on Australian and foreign corporates to gain exposure to the credits. He singled out Ford Motor Credit as an example of a foreign company with outstanding bond issues in Australian dollars on which it would consider selling protection.
Piper noted that credit derivatives allow investors exposures to credits that may not be available in the underlying bond market and could allow the fund manager to pick up exposure at a better price than via the underlying asset. He declined further comment.
"It's good to see more people talking about getting involved in the market," said one credit derivatives trader. He continued that with the growing end-user interest in Australia, the domestic credit derivatives market is on its way to another record year in terms of volume.
UBS Global Asset Management (Australia) currently trades exchange-listed instruments and futures.
