MERRILL LYNCH CREATES NEW DERIVATIVES SUBSIDIARY; INNOVATIVE STRUCTURE TO BE RATED TRIPLE A BY MOODY'S
MERRILL LYNCH CREATES NEW DERIVATIVES SUBSIDIARY;
INNOVATIVE STRUCTURE TO BE RATED TRIPLE A BY MOODY'S
NEW YORK, Nov. 11 /PRNewswire/ -- Merrill Lynch & Co., Inc. (NYSE: MER), announced today the creation of a U.S. subsidiary, Merrill Lynch Derivative Products, Inc. (MLDP). MLDP will intermediate interest rate and currency swaps between Aa and Aaa-rated clients and Merrill Lynch's traditional swap dealing entity, Merrill Lynch Capital Services, Inc. (MLCS). MLCS will continue to transact new swaps with other counterparties. All swap contracts presently booked in MLCS will be unaffected. MLDP has received a prospective Aaa counterparty rating from Moody's Investors Service.
"Swaps have become one of the most important financial instruments in the capital markets. They are used by virtually every major institution around the world," noted Edson V. Mitchell, chairman of MLDP and a Merrill Lynch managing director in the Debt Markets Group.
"Merrill Lynch's swap business is integral to its debt securities origination and distribution businesses around the world. The creation of MLDP will support our leading position in the swap and debt markets business globally and permit us to expand our activities in credit sensitive sectors of the market, where a Triple A credit rating is a transaction precondition," he said. Merrill Lynch is currently one of the leading participants in the global market for swaps, options and other derivative products.
According to Conrad Voldstad, president and CEO of MLDP and a Merrill Lynch managing director in the Debt Markets Group, "The new subsidiary will significantly enhance our position as a swap counterparty with highly rated international clients, supranationals, sovereigns, government agencies and banks."
Swaps enable investors to adjust the characteristics of a security to suit their requirements, regardless of currency, while giving the issuer the ability to construct the liability it needs. Swaps are critical for new issues, private placements and secondary bond trading. They are also actively used as a liability management tool and as an instrument for investment strategy.
Merrill Lynch & Co., Inc., provides through its subsidiaries and affiliates investment, financing, insurance and related services on a global basis.
/CONTACT: Monica Prihoda of Merrill Lynch, 212-449-7293/
(MER) CO: Merrill Lynch & Co., Inc.; Merrill Lynch Derivative Products, Inc. ST: New York IN: FIN SU: PDT GK-TS -- NY044 -- 3009 11/11/91 11:50 EST