Derivs - Credit

Risk-wary investors are avoiding high-yield credit default swaps this year as liquidity dries up, with volumes down by more than half, according to some estimates.

Asian sovereign credit-default swap spreads have widened dramatically in the past month, setting off speculation the asset class is witnessing a shift in volatility profile.

Corporate credit correlation traders were swamped with client pricing requests early this week as the Street scrambled to do month-end marks.

Nervous investors are buying protection on the iTraxx, pushing spreads wider.

U.S. desks are generally holding off from pitching a credit structure that allows holders to avoid marking-to-market positions.

The number of collateralized debt obligations in default broke through 200 last week to total $208 billion as credit conditions continue to deteriorate. The figure is up from $176 billion last month.

Flows in credit default swaps on U.K. bank HBOS remained unchanged today despite publicity over short selling on the name.

New York State Insurance Regulator Eric Dinallo’s moves to tighten the rulebook for monolines active in credit default swaps has drawn fire from some in the derivatives market.

Regional players were largely unmoved by the Reserve Bank of India’s decision Thursday to stall the introduction of credit derivatives.

There was a burst of bids and offers for mezzanine protection toward the end of the week in the corporate correlation market, spurring rumors that a large managed collateralized debt obligation is possibly being restructured.

Barclays Capital, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan and Morgan Stanley have made the shortlist for Global Derivatives House Of The Year in DW's fourth annual awards.

Russian derivative bankers are heading home, tempted by cash bonuses and a boom in the local markets.