Wednesday, 23 July 2014
Last updated 13 hours ago
Apr 18 2007 | 4:14pm ET
Hoping to lure institutional investors without commodity exposure into the asset class, Credit Suisse has issued US$190 million in long/short collateralized commodity obligations notes. The notes, which have received Fitch Ratings’ highest rating, are the first global long/short CCO transaction, according to CS.
“The combination of the long and short portfolio mitigates the risk to principal loss as well as mark-to-market value movements, whilst maintaining a yield substantially about most other AAA-rated instruments,” Gunnar Hoest, of CS’s fixed-income department, said. The notes, in five- and three-year tranches, were priced at a spread of 195 basis points and 180 bps over benchmark, respectively, and are available in U.S. dollar-, euro- and Australian dollar-denominations.
Buyers included banks, insurance companies and mutual funds, CS said, many of which have no experience with commodities exposure.
“It allows investors to put money in a balanced long and short basket of commodities in note form, diversifying their portfolios beyond the traditional credit and equities asset classes,” Bikran Chaudhury, also of the CS fixed-income department, said.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…