Latest DTCC CDS Update (Week Of August 14)
After several consecutive weeks of equity market mimicking and rerisking, the CDS market finally saw a net derisking in the week ended August 14, across virtually sectors, with the biggest action concentrated in the financials arena. Total net notional change was substantially higher than last week's -$14.5 billion, increasing to $66.1 billion, with a marked derisking in financials at $62.6
billion. Other notable derisking spaces were Consumer Services at $27.6 billion (again) and Utilities at $20 billion.
Total Gross CDS outstanding was at $26.2 trillion, a decline of $100
billion from the prior week. This consisted of $15.2 trillion in
single names, $7.9 trillion in indices and $3.1 trillion in tranches,
most of which were held by dealers once again.
In the single name category, there were no big surprises. In holding with the overall financial derisking theme, banks and financial companies made up the bulk of the Top 20 names: Credit Suisse led, with an impressive $2.7 billion in net derisking on a massive $30.8 billion increase in gross outstandings. Other financials in the group included Banco Santander, JP Morgan, Wells Fargo, Citi and MBIA. Notable derisking non-financials included Carrefour, Holcim, Rentokil, Ford, and an assortment of sovereign names including Portugal, Brazil and Italy, which seems to be a perennial contender in the weekly top derisking category.
On the rerisking side, some of the notable names were Bank of America, Starwood Hotels, Time Warner, Deutsche Bank, IBM, Caterpiller and Home Depot.