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Deutsche Bank to Make Markets in Credit Default Swaps on U.S. Leveraged Loans.

NEW YORK -- Deutsche Bank announced today it has started active market making of credit default swaps on leveraged loans (LCDS). The LCDS market will allow investors to take short- or long-term positions on leverage loans and open up this private market to new investors looking for higher-yielding assets. Unlike traditional CDS transactions, LCDS restricts deliverable obligations to specific levels of bank debt, allowing buyers of protection a more efficient hedging instrument and insulating sellers from exposure to bonds.

"An industry-wide working group has made substantial progress in crafting a standard document that contemplates the hedging needs of bank portfolios as well as the needs of single name investors, synthetic investors and the second-order products," said Chip Stevens, Managing Director and U.S. Head of High Yield CDS Trading at Deutsche Bank. "While we expect major dealers to agree upon that document in the near future, in the interim we are excited to begin active market making on LCDS, which gives either the buyer or seller of protection the option to transition their contract to the market standard when that document becomes fully adopted by the Street."

"As the credit markets continue to grow and rapidly evolve, we are always looking to cultivate new markets and innovative products to offer to our clients," said Derek Smith, Managing Director and Head of U.S. Flow Credit Trading at Deutsche Bank. "LCDS gives clients an opportunity to access the leveraged loan market with the flexibility of the traditional CDS market; currency, maturity and size can be customized to meet the client's needs."

Earlier this month, Deutsche Bank announced it would make markets in CDS of European leveraged loans and has begun trading with a number of counterparties.

Deutsche Bank

With Euro 992 billion in assets and 63,427 employees, Deutsche Bank (NYSE: DB) offers unparalleled financial services in 73 countries throughout the world. Deutsche Bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.

Deutsche Bank ranks among the global leaders in corporate banking and securities, transaction banking, asset management, and private wealth management, and has a significant private and business banking franchise in Germany and other selected countries in Continental Europe.

Deutsche Bank Securities Inc., member NYSE, NASD and SIPC, is the investment banking and securities arm of Deutsche Bank AG in the United States.
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Publication:Business Wire
Date:Mar 30, 2006
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