CDPCs

A credit derivative product company or CDPC is a company that sells protection on credit derivatives – usually CDS or tranches. CDPCs have a AAA credit rating and generate revenue by collecting premium on the protection they sell and investing that premium in high-quality, short-duration fixed income securities. They have fallen out of favour since the 2008 financial crisis.

• CDPC note ratings withdrawn

  Moody's has withdrawn its ratings on five senior subordinated and three subordinated notes issued by Athilon Capital Corp, affecting US$238m of debt securities. The rating action comes after the CDPC distributed capital from eligible investments to selected investors in connection with the cancellation and retirement of US$312m of notes in a manner that, in Moody's opinion, is not contemplated by .......

  News Round-up    21 April 2015

• Voluntary liquidation approved

  Primus Guaranty's shareholders have approved a proposal to wind up the company by way of a members' voluntary liquidation, after it held a special general meeting of shareholders (SCI 28 October). Mark Smith, of Deloitte, has been appointed by the shareholders as the company's liquidator.

  With the commencement of the voluntary liquidation, the powers and authorities of the company's directors .......

  Job Swaps    21 November 2014

• Investment manager change for CDPC

  BlueMountain Capital Management has been appointed replacement investment manager to Channel Capital under the provisions of a new investment management agreement. The terms of the appointment do not alter the responsibilities, duties and obligations of the investment manager under the prior investment management agreement. Channel and BlueMountain have also concluded a transitional services agreement designed to support BlueMountain to ensure .......

  Job Swaps    4 July 2013

• Athilon upgraded

  S&P has raised the issuer credit rating (ICR) on the Athilon CDPC to triple-B plus from double-B plus. At the same time, the agency affirmed its ratings on the senior subordinated, subordinated and junior subordinated notes. Its outlook on Athilon is stable.

  The higher ICR primarily reflects S&P's view regarding the seasoning credit of Athilon's tranche CDS portfolio. The CDPC .......

  News Round-up    4 April 2013

• DPC criteria updated

  Fitch has updated its rating criteria for derivative product companies (DPCs). The agency confirms that it will look to the DPC's stand-alone credit strength, as well as the sponsor's, when rating vehicles engaging in standardised, liquid derivatives.

  Under the criteria, a ratings floor of single-A will apply for continuation DPCs that are well-capitalised and appropriately structured, whereas a ratings floor .......

  News Round-up    8 January 2013

• CDPC upgraded

  S&P has raised the issuer credit rating (ICR) on Athilon Capital to double-B plus from double-B. At the same time, the agency affirmed its ratings on the CDPC's senior subordinated, subordinated and junior subordinated notes. The outlook on Athilon is stable.

  Approximately 99% of the reference entities in Athilon's portfolio are corporate and 1% is sovereign. The upgrade to the .......

  News Round-up    27 April 2012

• Swap dealer rule credit positive for CDPCs

  The CFTC/SEC final rule on swap dealer designation (SCI 19 April) exempts CDPCs and DPCs, at least during its phase-in period. The rule is credit positive for existing CDPCs as it exempts them from collateral posting requirements, but the rule is credit negative for DPCs because it eliminates regulatory minimum capital requirements that the market had expected would apply, according .......

  News Round-up    24 April 2012

• Primus buyback authorisation upped

  The Board of Directors of Primus Guaranty has approved an increase of US$25m in its buyback authorisation to repurchase outstanding common shares and 7% Senior Notes due 2036 from time to time in the open market or in privately negotiated transactions at prices and upon terms approved by management. The authorisation does not obligate the company to acquire any specific .......

  Job Swaps    31 October 2011

• Manager swap for CDPC

  Oak Hill Advisors has replaced AXA Investment Managers as portfolio manager for Deutsche Bank's CDPC, NewLands Financial. Certain amendments to the vehicle's operating guidelines have also been implemented that will require it to refrain from making distributions to its equity holders that would reduce its capital below a minimum requirement unless additional capital adequacy tests are met and entering into .......

  Job Swaps    11 July 2011

• CDPC portfolio information revealed

  Primus Financial Products has released details of its credit derivatives portfolio. As of 21 June, the firm's consolidated portfolio of single name credit swaps was US$5.43bn (in notional amount) and had a weighted average remaining maturity of 1.22 years. Approximately 62% of the single name CDS portfolio is denominated in euros, with the remainder denominated in US dollars.

  The last .......

  Job Swaps    27 June 2011

• CDPC expands permitted investments

  CDPC Athilon has amended its operating guidelines to expand its permitted eligible investments to include equity and fixed income instruments for which its capital exposure to loss is limited to the amount paid for the instrument plus accrued but unpaid interest, if any, and each party to or issuer of an instrument is a corporation or SPV that is not .......

  News Round-up    24 May 2011

• CDPC counterparty rating downgraded

  Moody's has downgraded the counterparty rating of NewLands Financial to Aa2, where it remains under review for possible downgrade. The agency has also withdrawn its ratings on all of the CDPC's outstanding debt.

  NewLands redeemed all of its debt with a face value of US$385m on 20 December, leaving just over US$130m in capital to support its US$5.45bn notional CDS .......

  News Round-up    22 December 2010

• CypressTree sale closed

  Primus Guaranty has completed the sale of CypressTree Investment Management (SCI passim) - its third-party asset management subsidiary - to Commercial Industrial Finance (CIFC). Berkshire Capital Securities acted as advisor to Primus on the sale of the CLO business.

  Primus Guaranty's credit protection business - which consists of Primus Financial Products' US$11.8bn portfolio of credit default swaps - is not .......

  Job Swaps    2 December 2010

• CDPC's ratings corrected

  S&P has corrected its issuer credit ratings on the Athilon CDPC to double-B from double-B minus and on Athilon's senior subordinate note issues to single-B plus from triple-C plus. The move follows the agency's detection of the inclusion of an ABS CDO in the calculation of the corporate backed tranche's capital exposure in the capital report Athilon sent on 9 .......

  News Round-up    2 November 2010

• Primus ceo moves on

  Primus Guaranty has promoted cfo Richard Claiden to the position of ceo, succeeding Thomas Jasper. Claiden will also serve on Primus Guaranty's board of directors.

  Before joining the firm in 2003, Claiden was md and head of operational risk at the investment banking division of JPMorgan Chase. Prior to this, he held executive positions at the Canadian Imperial Bank of .......

  Job Swaps    1 November 2010

• CDPC ratings lowered and withdrawn

  S&P has lowered its issuer credit rating (ICR) on Invicta to single-A plus from triple-A, and the ratings of its class A notes to single-A minus from triple-A and class Bs to triple-B minus from double-A. At the same time, the agency removed these ratings from credit watch with negative implications and subsequently withdrew them.

  S&P also disclosed that it placed .......

  News Round-up    13 October 2010

• Primus settles LBSF claims

  Primus Financial Products has settled all outstanding claims with Lehman Brothers Special Financing Inc (LBSF), amounting to approximately US$1.1bn of CDS. Five reference entities in the portfolio, with a notional principal of US$66m, suffered credit events over the course of the last two years. Premiums unpaid by LBSF and owing to Primus totalled approximately US$16m at the time of settlement.

  Job Swaps    6 October 2010

• Primus divests CLO subsidiary

  Primus Guaranty is to sell CypressTree Investment Management, its third-party asset management subsidiary that it acquired in July 2009 (see SCI issue 145), to Commercial Industrial Finance Corp (CIFC). Terms of the transaction were not disclosed.

  CypressTree manages or sub-advises approximately US$2.8bn of high yield and leveraged loan assets in eight CLOs - Primus CLO I and II, and Hewett's .......

  Job Swaps    29 September 2010

• CDPC debt ratings upgraded on commutation

  Moody's has upgraded the senior subordinated debt ratings of Athilon Capital Corp from Caa2 to B3. The move affects US$350m of debt.

  The key driver behind the rating actions was the commutation on 17 September of a CDS on an ABS CDO, against which Athilon had written protection. Athilon and the protection buyer of the ABS CDO have agreed on .......

  News Round-up    29 September 2010