Derivs - Credit

Asian arrangers and credit managers are essentially thumbing their noses at Fitch Ratings in the wake of its raft of collateralized debt obligation downgrades.

Large credit positions are being set up that take the view that the historical spread relationship between monolines' holding and operating companies will follow MBIA and break down—and then flip back to its normal relationship.

Negative U.S. economic news is pressuring the European credit default swaps index.

An industry plan to reduce the outstanding number of trades in the credit derivatives market took further shape last week as Creditex and Markit Group joined to run the process.

The ABX index has seen its first write-down since inception leaving protection sellers facing payouts.

Demand for sharia-compliant credit derivatives could be about to take off. Nicolas Boutar, structurer at BNP Paribas, said his firm is working on credit strategies before moving to market products.

Banks are showing some investors a play structurally close to a bespoke collateralized loan obligation with embedded leverage similar to a total return swap.

Recent high-yield debt restructurings have led portfolio managers to look at full capital structure trades taking the view high-yield defaults will be back-loaded, rather than taking place in the near term.

Flows on single name credit default swaps in Europe were stagnant today, as market participants took their cue from European equity markets.

Two synthetic collateralized debt obligations arranged by RBC Capital Markets in London have triggered collateral calls for three school districts in Wisconsin.

The credit market continued its freefall this week and that sparked a 30 basis points widening in the investment-grade index as investors bought protection as a macro hedge.

Banks and monolines are picking up the pace of credit default swap commutations to try to receive a payout on the losses they are incurring on collateralized debt obligations.