Bets on for credit spread warrants

Corporate hedging

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Claiming a product is the closest thing to a ‘free lunch’ in the financial markets is bound to raise some eyebrows. But that is the language Dresdner Kleinwort Wasserstein (DrKW) is bandying about in connection with the new hedging strategy it has developed allowing corporates to monetise credit spread volatility.

DrKW launched the first credit spread warrant in May for triple-B rated French supermarket chain Casino. Credit derivatives experts believe similar deals may already have been exe

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