Two groups of dealers have clashed over how best to structure standardised repackaged bond transactions. One bank describes the opposing offering as too operationally complex, while a rival claims its own approach makes default scenarios easier to manage.
Bond repacks, which combine a bond and a derivative into a special-purpose vehicle (SPV) and pay out typically floating coupons to investors, have been a popular way for investors to generate extra yield in recent years.
Dealers are now looking
The week on Risk.net, March 10-16 2018Receive this by email