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 159,441.15 688 8.06%
2 Citi 156,412.44 629 7.91%
3 Bank of America Merrill Lynch 128,902.57 511 6.52%
4 Barclays 125,463.27 484 6.34%
5 HSBC 102,014.24 510 5.16%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Bank of America Merrill Lynch 12,900.23 34 6.66%
2 BNP Paribas 12,334.48 61 6.37%
3 UniCredit 11,196.47 58 5.78%
4 Citi 9,580.75 37 4.95%
5 Deutsche Bank 8,953.95 35 4.62%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Morgan Stanley 5,254.13 23 10.50%
2 JPMorgan 4,766.39 27 9.53%
3 Goldman Sachs 4,259.98 19 8.51%
4 Citi 3,649.88 23 7.29%
5 UBS 3,602.23 16 7.20%