Handelsbanken Trading plans to offer interest-rate and credit structured products for the first time and start making markets in credit default swaps. Tony Lindlöf, head of structured products and syndicated loans in Stockholm, said the department would hire structures and transfer existing employees. He declined further comment.
Fredrik Sjöstrand, head of fixed income-Europe in Stockholm, said the bank is in the process of repositioning itself to focus on structuring low volume high margin products. "I am a trader and I know how hard it is to make money trading," he noted. The interest-rate products will include constant maturity swaps and digital interest-rate options. The credit products will include synthetic and cash collateralized bond obligations, asset-backed securities and credit-linked notes. The bank will offer these products to customers predominately in Scandinavia.
He added the equity downturn also makes it easier to market interest-rate and credit structured products because investors are diversifying their portfolios.
