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Editor`s letter
The credit-default-swap rate offers benefits that a credit rating does not, which is a perspective from the people who have to buy and sell the paper. Sometimes a solution to a problem comes along that is so simple it defies all the thought and toil that has gone before it. One such solution is the CDS, otherwise known as the credit default swap. The good thing about a CDS is that it provides the market's perspective on credit. The swap rate is worked out by traders taking a view on the relative credit merits of issuers and then assigning a level on their market assessment of risk.Take BNP Paribas. 
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Cover Story:
Lehman restructured
The collapse of Lehman Brothers left billions of dollars of structured notes with unhedged exposures, prompting issuers to scramble for new counterparties to restructure trades. Meanwhile, some structured product providers have offered hope to investors in Lehman-issued paper by absorbing the defunct trades into highly geared credit-linked notes. Matt Cameron looks at the restructuring process  |
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Markets:
Sourcing security
Participants in the European structured products industry face an unprecedented challenge in managing counterparty risk. One of the beneficiaries of the crisis of confidence will be the structured funds industry, which offers the possibility of collateralising assets for watertight protection. Sophia Morrell reports  |
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Hedge funds:
The ideal copy
A series of hedge fund redemptions in the third quarter of 2008 have alerted investors to just how illiquid these investments can be. Add in the restrictions that some of funds have placed on withdrawing cash, and it is easy to see why structured products that replicate hedge funds are in vogue by Michael Marray |
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Markets:
Fuelling an emissions market
The carbon emissions credits market is heating up as investors are increasingly able to tap into the theme via structured products and exchange-traded funds. But how viable is the carbon theme as an underlying and what challenges do structured products based on carbon credits face? Emma Dunkley reports |
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Volatility Products:
Catching the wave
Dealers are offering a swathe of volatility-linked products in Asia both as risk-reduction and investment tools, generally based on fear gauge, the Vix index. How are these products catching on in the region? Georgina Lee reports |
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Europe Conference:
The transparency tide
The issue of counterparty risk and how best to convey it to retail investors dominated the agenda at the Structured Products Europe conference. Delegates explored ways of identifying and mitigating risk, while the rise in structured funds and regulation looks set to push the market into a new phase. By Emma Dunkley and Richard Jory |
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