The quest for better credit (TT May02 p42-44)

The applications discussed in this article provide strategies for risk managers addressing portfolio concentration risk, for issuers seeking to minimise the costs of liquidity in the debt capital markets, and for investors pursuing assets that offer attractive relative value. Credit Derivatives (CDs) create huge opportunities to profit from discrepancies in the pricing of credit risk across distinct markets through the ability to bypass barriers between different asset classes, maturities, rating categories and currencies.