Derivs - Credit

Firms chasing funding are looking to issue structured notes to the retail market in general and Taiwan in particular, given the low deposit rates on the island and investment appetite for capital-protected notes.

The number of investors in synthetic collateralized debt obligations will be significantly reduced for the foreseeable future, but practitioners are hoping sophisticated buyers will continue to play in the field.

The Bank of Thailand is understood to have submitted a new credit derivative regulation to the Thai Ministry of Finance that could pave the way for local commercial banks to enter into total-return swaps, currently not permitted by law without BoT consent.

The Securities and Financial Markets Association has formed a global, investor-led task force to examine the credit rating agencies system and the group is expected to meet sometime before mid-May to map out its plan and priorities.

Regulators have told DW that creating a central clearing house for credit-default swaps is not a move they are pushing for.

The credit markets were in defensive mode last week as investors prepared for negative earnings by buying up protection on single-names on the dozens of companies that reported last week.

London-based Pamplona Capital Management will launch a credit opportunities fund in the next six months.

Lawyers say the recent slew of collateral disputes caused by valuation discrepancies is leading to either entirely new agreements or significant changes, rather than lawsuits.

Investors are starting to sell protection on highly-rated tranches of collateralized loan obligations as a way to get around the traditionally funded nature of the structures.

Michael Llodra, JPMorgan's former head of collateralized debt obligations backed by asset-backed securities, has joined Boston-based Harvard Management as a structured products specialist.

Former HSBC Asian credit structuring chief Jeffrey Tolk has joined hedge fund manager 3 Degrees Asset Management as a principal focusing on distressed debt and special situations.

CDX, the main U.S. credit derivatives index, pulled sharply tighter Thursday, continuing to puzzle traders and sparking only limited trading activity.