Derivs - Credit

Korean issuers, the mainstay of the Asian debt capital markets in recent years, are set to return to the international bond markets in force, with financial institutions and corporate borrowers planning dollar deals, EuroWeek can reveal.

Silvan Herriger, the ex-head of index derivatives trading for Europe at BNP Paribas in London, has joined interdealer broker Vantage Capital Markets as global co-head of brokerage, a new role.

Michel Barnier, the new European Commissioner for Internal Market and Services, is set to hold talks with U.K. regulators and government officials March 2 on derivatives reform, financial transaction taxes and the Volcker rule.

The auction to settle credit default swaps referencing CEMEX today landed at 97%, meaning protection sellers will pay three cents on every dollar of protection sold.

The inside market midpoint, or the half-way result, in the auction to settle credit default swaps referencing CEMEX has come in at 92, indicating the payout from protection sellers could be as low as 8 cents on every dollar of protection sold on the Mexican cement producer’s debt.

Sharon Bowles, chair of the European Parliament’s Economic and Monetary Affairs Committee, wants to curb speculative trading of sovereign credit default swaps by enforcing position limits and other ownership restrictions, after seeing spreads gap out on Southern European sovereigns like Greece.

The U.K. Financial Services Authority and H.M. Treasury want to extend the Market Abuse Directive to cover credit default swaps.

Primus Guaranty is working on a successor to its Primus Financial Products unit that could see the parent acquire a regulated bank or insurer through which it would sell protection in the form of financial guarantee insurance.

The rise in demand for default protection on Southern European sovereigns has the potential to saddle banks with losses, according to a report out today by Moody’s Investors Service.

The credit markets, both corporate and sovereign, continued to be captivated by the crisis enveloping Greece this week. The Markit SovX Western Europe index reached a record wide level of 112.5bp on Monday amid fears that the problems in Greece couldn’t be contained and would spread throughout the peripheral eurozone.

The Depository Trust & Clearing Corp.’s Trade Information Warehouse for over-the-counter credit derivatives is due to be operated by a new regulated entity called the Warehouse Trust Co.

The soon-to-be created European Supervisory Authority (Securities and Markets) will be responsible for regulating clearing houses under new plans revealed today.