ABN AMRO plans to build up its total-return swap activities in the U.S. by creating more exotic products with longer maturities. John Haggerty, director in credit derivatives, global financial markets in New York, said the firm will likely hire sales professionals, and possibly traders, to help develop the business line in the short to medium term.
ABN has already executed a handful of plain vanilla total-return swaps with maturities of less than a year. The firm is seeing client demand for total return swaps, much of which is for exotic structures, and the buildup will give it the ability to capture this business, he noted. In the swaps clients will pay or receive baskets of assets in return for a LIBOR-based rate.