Creditflux Newsletter

Having spent a year and a half working as chief executive officer of Australian waste management and recycling company Hungry Giant, former Bear Stearns managing director Christophe Denoux has moved back into the credit market as a trader at Westpac in Sydney. Now, that is the kind of recycling we like to see.

How do you get an otherwise ineligible loan to count towards par value in a CLO? Here is one idea: describe the loan as a CDO. That seems to be what AIB Capital Markets has done with one asset in its Clare Island CLO. AIB received a £2.8 million loan from a distressed debt exchange but, because Clare Island is strictly a euro vehicle, this would count for nothing in par value terms. Cleverly, AIB gets around this problem by deeming the loan to be a “CDO”, according to a recent rating agency confirmation announcement by a clearly bemused Moody’s.

“Do you know a broadcaster that desperately needs help?” asks an ad on the home page of US media company Radio One. The appeal is from an organisation that gives charity to radio presenters that have fallen on hard times. Perhaps it should give a nickel or two to Radio One, which was forced to skip a coupon payment on its bonds last month and restate its accounts. With senior lenders set to push the company into bankruptcy unless it can come up with a survival plan, this might be the best offer on the table.

They said it

“I guess all those guys who said they were going to buy $10 billion of protection if IG ever traded double-digits again were out playing golf today...” 

A sell-side trader complains about the lack of protection buyers as the North American credit index dips below 100 basis points on 2 August. (The golf players missed a great trade, since CDX NA IG was back above 112bp three weeks later)