Vanilla Structures To Make Comeback

Dealers and investors may return to vanilla credit structures if credit-default swaps continue to widen.

  • 06 May 2005
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Dealers and investors may return to vanilla credit structures if credit-default swaps continue to widen. Over the last year, tightening spreads have led dealers to pitch exotic structures, such as collateralized debt obligations squared, in order to boost returns. But spread widening, prompted by fears of a General Motors downgrade, will boost yields on plain vanilla CDOs.

If spreads continue to widen, investor interest will turn back to simple structures, according to John Lovisolo, a managing director and head of structured credit product sales at Barclays Capital in New York. Michael Gerity, a senior director with Fitch Ratings in New York, agreed, adding he has had calls from counterparties looking to revive simple deals they put on hold when spreads pulled in. In a widening spread environment, those deals start to make sense again, he said. Yet structurers will seek new ways to enhance yield if spreads narrow back in, Lovisolo said.

  • 06 May 2005

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 58,137.72 186 8.23%
2 JPMorgan 57,032.77 202 8.08%
3 Barclays 49,551.65 159 7.02%
4 Bank of America Merrill Lynch 42,095.04 147 5.96%
5 Deutsche Bank 38,217.89 137 5.41%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 Bank of America Merrill Lynch 6,045.16 4 18.58%
2 BNP Paribas 1,742.18 7 5.36%
3 Credit Agricole CIB 1,539.94 8 4.73%
4 MUFG 1,257.24 4 3.87%
5 SG Corporate & Investment Banking 1,165.08 6 3.58%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 UBS 998.25 3 13.49%
2 Citi 693.55 2 9.37%
3 Morgan Stanley 572.72 3 7.74%
4 Bank of America Merrill Lynch 509.34 3 6.88%
5 Jefferies LLC 409.89 4 5.54%