The Hong Kong branch of Italian bank IntesaBci is considering buying into its first synthetic CDO in Asia. Rebecca Chang, associate director of the structured finance and advisory group, said the bank is studying the feasibility of investing in such structures as new issuances in the Asian convertible bond market, where IntesaBci normally invests, have been drying up in recent months. Chang continued that she has yet to contact any potential counterparties as it is in the initial stages of evaluation and that she is in touch with the European offices of IntesaBci about the possibility of investing in synthetic CDOs referenced to a basket of Asian names. No time frame has been decided.
The bank also invests in first-loss structured credit derivatives. IntesaBci, which has had a structured products group in Hong Kong for more than two years, may look to beef up in the coming months adding one or two structurers, said Chang.
