About credit
We offer an ability to trade and structure credit risks. We can provide investors with more opportunities to invest in credit, transferring credit risk away from others who may not wish to have it. Debt capital and derivative markets have evolved to more efficiently transfer and trade credit through risk bearing debt securities and other products.
Capabilities and track record
Complementing our debt securities capabilities, we have other credit based products and services that can enhance returns in your portfolio. We also have credit risk management capabilities for corporations and investors who wish to reduce, transfer or otherwise restructure credit exposures.
Credit products and services
Contact us on (612) 8232 8304 or at debtmarkets@macquarie.com
| Credit Default Swap (CDS) |
A derivative contract between two parties that isolates and transfers the credit risk of a reference asset from one party to another. The party that takes on credit exposure receives a periodic fee. The party shedding the risk receives a payment equal to the principal amount of the CDS on the occurrence of defined credit events. |
| Credit derivative |
A much abused term. Is often used wrongly when a credit default swap (CDS) is what is being described. A CDS is a type of credit derivative. A generic definition of credit derivative could be any credit risk that is not a standard debt or interest rate product and one where credit risk is being synthetically transferred to a holder in a funded or unfunded form. |
| Asset swap |
The combination of a debt security and a currency and/or interest rate swap. It allows a fixed rate investor to turn a credit spread in a bond into a spread over the floating reference rate (eg. bank bill) and a floating rate investor to change credit spread over a floating reference rate (BBSW + xxbps) into a fixed rate credit spread. Asset swapping allows investors to manage duration and to trade credit spreads and to take advantage of credit risk opportunities in foreign markets without foreign currency market risks. |
| Credit Linked Note |
(CLN) A CLN is a combination of a credit default swap and a debt security. It has the affect of collateralising a CDS. The investor of the CLN receives a return based on, but not the combined, credit risk of the reference asset and the issuer. |
| Total Return Swap (TRS) |
A TRS exchanges the total economic return (and risk) of a reference asset/s for a periodic payment. |
| Credit index replication |
An activity that delivers an index based (benchmark) return. Ideal for funds managers who manage to a specific benchmark. Can be delivered through a derivative or a note. Outperformance and zero tracking error to benchmark index. |
| Callable asset swaps |
An asset swap with a call embedded. Can be used in conjunction with convertible bonds and other structured securities to enhance returns and to separate credit risk from equity risk. |
Credit
structuring |
We can tailor make assets that suit your risk-return parameters by sourcing non-standard credit exposures and repackaging them. Allows you full access to opportunities not found in standard, traded debt instruments. |
Other related products
If you want to transact in and/or structure various types of debt securities we suggest you review our debt securities section.
If you want to hedge the interest rate exposure of a portfolio of debt securities or loan based liabilities, we suggest you review our interest rates section.
If you want to manage a portfolio of debt securities or interest rate exposures, (interest rate duration asset and liability management) we suggest you review our interest rates section.
Tailored solutions
If credit products and structuring aren't quite what you were looking for then call us and we'll help tailor a solution that meets your needs. If what you need is offered by another part of the Group, we'll direct you there.
If you want to raise debt through traded capital markets, we suggest you review our raising capital - debt section.
If you want to transfer credit and other risks of a portfolio synthetically or funded, we suggest you review the sections on securitisation, capital management or solutions for leasing businesses.
Click here to view our Financial Services Guide.
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