Credit derivatives product company
From Wikipedia, the free encyclopedia
A Credit Derivatives Product Company (CDPC) is a business focused on trading in credit default swaps contracts. CDPC typically sells insurance against someone failing to pay back a loan ('defaulting'). A CDPC is usually highly leveraged, meaning that if even a portion of its held credit default portfolio were to be 'triggered' at once, the CDPC would not have the capital to fully pay out the resulting insurance claims.
The CDPC business model is dependent on a triple-A rating from a credit rating agency[1] and must trade within closely defined limitations to be allowed to maintain their credit rating.[2]
History
The first CDPC was Primus Financial Products, launched in 2002.[1] In October 2008 Fitch Ratings withdrew its ratings on all five CDPCs that it had previously rated, citing in part "the uncertain business prospects for CDPCs".[3]
List of CDPCs
| Name | Established | Sponsors, Investors, related parties | CEO | Refs |
|---|---|---|---|---|
| Primus Financial Products | 2002 | Tom Jasper | [1] | |
| Aladdin Financial Products | 2007 | Aladdin Capital Holdings | Isaac Efrat | [3] |
| Athilon Structured Investment Advisors | 2004 Dec | Lightyear Capital | Pat Gonzales | [1][2][3] |
| Cournot Financial Products | Morgan Stanley | Frank Iacono | [3][4] | |
| Invicta Capital | 2007 Jan | Babson Capital, MassMutual | Steve Kahn | [3][5][6] |
| Quadrant Structured Credit Products | 2007 Oct | Magnetar Capital, Lehman Brothers | Gene Park | [3][7] |
| Pallium Investment Management | Bank of Montreal, others | [2] | ||
| NewLands | 2007/2008 | DeutscheBank, AXA | [2] | |
| Structured Credit Holdings | 2006 June | Aquiline, CalPERS, CDPQ, Calyon, Triad, ex-employees of Radian Asset Assurance | [8][9] | |
| Bear Stearns Asset Management | [2] | |||
| Channel Capital | Early 2007 | Calyon, LBBW, Principia Partners (IT) | [10] | |
| Koch Financial Products | ||||
| Satago Financial Products | ||||
| Theta Corporation | December 2004[11] | Gordian Knot Limited [12] | [13] | |
| Deerfield Capital Management | ||||
| Harbor Road Financial Products | Tricadia Capital | [14] |
See also
- Monoline insurers (also dependent on a AAA rating, also sold credit default swaps)
