BNZ Investment Management, the fund management arm of the Bank of New Zealand, with NZD120 million (USD52 million) under management, is considering its first use of credit derivatives. Stephen Hong, manager of portfolio research and fixed income in Wellington, said he is considering the product for New Zealand names as a way to diversify the fund manager's domestic portfolio and enhance return.
Hong continued that once the bank agrees on suitable documentation it will decide which credit products to use, declining to elaborate. No timeframe has been decided. He continued that the fund uses Kiwi-denominated interest-rate swaps for hedging purposes. Regular counterparties include ANZ, Westpac, Deutsche Bank and Credit Suisse First Boston. Spokesman at the firm's did not return calls.