UBS Warburg has added structured credit products to its credit derivatives trading operation and plans to make additional hires to boost the effort. Hugh Evans, managing director and co-head of global credit derivatives trading in London, said the trading department priced its first synthetic CDO last week. The hire is part of an ongoing effort to beef up the department, which started in March. Evans plans to hire another five to 10 structurers and traders in London, Stamford, Conn., and Tokyo within the next 12 months.
The firm decided to expand its credit derivatives operation to including diversity trades, such as synthetic CDOs, because of a combination of client demand and internal expertise, according to Evans. UBS Warburg already trades credit-default swaps and has used special purpose vehicles and credit-linked notes to structure trades, so synthetic CDOs is the logical next step, according to Evans. He added client demand for diverse credit products has shown it is here to stay.
UBS Warburg has structured synthetic CDOs before in its principal finance department, which is on the buyside of the investment bank, (DW, 4/30).
