Deutsche Bank starts active market making of credit default swaps on leveraged loans

By Sara Rosenberg

New York, March 30 - Deutsche Bank has started active market making of credit default swaps on leveraged loans (LCDS), which will allow investors to take short- or long-term positions on these loans and will open up this private market to new investors looking for higher-yielding assets, according to a news release.

"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, in the release.

"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," Stevens added.

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