Derivs - Credit
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The Frank-Dodd bill on the floor of the House of Representatives has inspired a popular ABX capital structure trade among hedge funds and prop desks.
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Credit default swaps on asset-backed securities will see an increase in demand Europe and become a key alternative to cash investments, according to traders at Global ABS 2008 conference in Cannes.
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Dealers for the commercial mortgage-backed securities CMBX index are pushing the idea of trading tranches based off the index.
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Credit investors are paying closer attention to the price of oil as the increase in price volatility may have a larger technical effect on corporate costs, and in turn credit quality, than it has in the past.
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Flow traders believe they have spotted a temporary wrinkle in The Clearing Corporation and The Depository Trust and Clearing Corporation plan to launch a much anticipated clearinghouse for credit derivatives.
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In a reversal of the past week’s movements tighter in the credit correlation market, the entire capital structure widened across the investment-grade CDX 10 standardized tranches this week.
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The U.K. retail market has been at the center of credit-default swaps trading this week as people digest the impact of a weakening housing market. -
The deadline for resolving negative watch ratings placed by Fitch Ratings as a result of its new collateralized debt obligation methodology could be pushed back towards year-end, according to the Royal Bank of Scotland.
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A possible blunder by Moody’s Investors Service in rating constant proportion debt obligations is likely to make investors even more reluctant to get off the structured credit sidelines.
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Other corporate collateralized debt obligation managers are considering whether to drop Fitch Ratings in the wake of the moves by BlackRock Financial this week to ask bondholders to drop Fitch.
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Amit Arora, formerly a managing director in the structured credit group at Bear Stearns in New York, started this week at JPMorgan along with a team of several junior traders.
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Stefano Galliani, a bespoke corporate collateralized debt obligation trader at Merrill Lynch in New York, has joined Morgan Stanley in a similar role.
