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 195,530.15 878 8.20%
2 Citi 184,076.24 754 7.72%
3 Bank of America Merrill Lynch 154,322.27 637 6.47%
4 Barclays 143,638.79 577 6.03%
5 HSBC 121,485.91 639 5.10%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Credit Agricole CIB 22,991.03 88 8.00%
2 BNP Paribas 22,856.10 93 7.96%
3 Bank of America Merrill Lynch 17,816.23 50 6.20%
4 UniCredit 13,146.65 71 4.58%
5 Deutsche Bank 13,089.86 49 4.56%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Morgan Stanley 6,646.08 29 10.31%
2 JPMorgan 6,222.43 38 9.66%
3 Goldman Sachs 5,596.92 27 8.68%
4 UBS 4,205.38 21 6.53%
5 Citi 4,178.15 30 6.48%