Banks Enter Weather Derivatives Market

  • 07 Jan 2002
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Investment banks entering the weather derivatives market gave the nascent industry a seal of approval just before Enron, one of its pioneers, filed for bankruptcy. Among the firms to enter were Barclays Capital (DW, 1/15), Dresdner Kleinwort Wasserstein (DW, 5/7), Credit Suisse First Boston, Deutsche Bank (DW, 5/20) and Italy's IntesaBci (DW, 7/16).

The collapse of the Houston-based company is expected to be felt for months to come and may stifle innovation (DW, 12/23). "Enron as a whole really sets everything back a bit," said one broker. However, the Nordic division of the company did not file for bankruptcy and is looking for a buyer (DW, 11/21).

However, before Enron collapsed there was a steady stream of new products. These included Entergy-Koch Trading structuring the first wind derivatives and Enron setting up a precipitation index (DW, 11/30, 8/19). But, temperature continued to be the main yardstick for weather derivatives contracts, with roughly 95% of all contracts referenced to it.

Last year also saw the first EUR100 million (USD90.54 million) weather transaction (DW, 10/14). The deal was executed by ABN AMRO on behalf of a Dutch counterparty rumored to be hedging exposure to frost. Spreads on heating-degree day contracts across Europe widened as a result, for example spreads on Heathrow blow out by 10 hdds to 1,700/1,702.

  • 07 Jan 2002

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 292,949.42 1319 8.57%
2 Citi 265,535.93 1117 7.77%
3 Bank of America Merrill Lynch 227,284.63 931 6.65%
4 Barclays 209,745.10 848 6.14%
5 Goldman Sachs 168,889.20 700 4.94%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 34,500.40 147 7.60%
2 Credit Agricole CIB 33,214.96 138 7.32%
3 JPMorgan 24,833.56 67 5.47%
4 Bank of America Merrill Lynch 23,368.44 65 5.15%
5 SG Corporate & Investment Banking 22,509.71 104 4.96%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 9,157.42 55 10.33%
2 Morgan Stanley 8,122.33 40 9.16%
3 Goldman Sachs 7,432.91 40 8.38%
4 Citi 6,426.54 47 7.25%
5 UBS 4,913.18 26 5.54%