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Derivatives

Aussie Bank Considers Credit Debut

Bank of Queensland, a regional bank in Brisbane with over AUD4.2 billion (USD2.1 billion) in assets, is considering entering the credit derivatives mart in the next six to 12 months for its AUD500 million (USD257 million) fixed-income portfolio, according to Tim Ledingham, head of financial markets.

The bank would only buy credit protection on Australian names as its portfolio solely consists of domestic bonds, according to Ledingham. He added that it is looking at entering the market within the next year because liquidity has improved. He continued that the Bank of Queensland is in discussions with a number of potential counterparties, which he declined to name. The bank also uses interest-rate swaps and options for its fixed-income portfolio, said Ledingham, declining further comment.

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