Wednesday, September 17, 2008

Impacts of an Investment Banker's Fall

Here are some details of the severe repercussions should AIG fall, take this to reference on the impact of the LEH collapse:

Sept 17 (Reuters) - (The following statement was released by the ratings agency)
Sept 17 - Moody's Investors Service announced today that is has placed its ratings of certain credit derivative transactions listed below (the "Transactions") that have exposure to Lehman Brothers Holdings Inc. ("LBHI") and certain UK Lehman companies, including Lehman Brothers International (Europe) ("LB-UK" and collectively with LBHI, the "LBHI Entities"), on watch for possible downgrade. Additionally, certain other Transactions were downgraded and left under review for further possible downgrade. Moody's explained that its rating action is based upon LBHI seeking protection under Chapter 11 of the U.S. Bankruptcy Code and LB-UK being placed into administration, a procedure governed by the Insolvency Act of 1986, on September 15, 2008.
The exposure of the Transactions to LBHI Entities arises from various roles performed by them in the Transactions, including (without limitation):
-counterparty under interest rate and currency swaps
-counterparty under credit default swaps
-guarantor
-liquidity provider
-repo counterparty
-remarketing agent
-depositor
-collateral manager
-servicer
-sponsor
-cash manager
-calculation agent
-paying agent
-collateral provider
-issuer
The Moody's ratings of the following Transactions have been placed on review for possible downgrade:

Arosa Funding Limited:
(1) 3 Tranches of Series 2006-2 Dynaso 2006-1 Notes
Current Rating: Baa3, on review for downgrade
Prior Rating: Baa3
Elva Funding Plc:

(1) Series 2006-6 through Series 2006-47 Credit Linked Notes
Current Rating: All on review for downgrade
Prior Rating: Various
Onyx Funding Limited:

(1) Series 2004-1 Class A Credit Linked Synthetic Portfolio Notes
Current Rating: Aa2, on review for downgrade
Prior Rating: Aa2

(2) Series 2004-1 Class B Credit Linked Synthetic Portfolio Notes
Current Rating: A3, on review for downgrade
Prior Rating: A3


Lastly, from tomorrow onwards, I will be changing the method of writing my blog, as I will begin to make posts on my market positions and price of execution, further commentaries will be made on http://systematic-trading.blogspot.com where a brief write up on the trade and fundamental arguments will be published. 

Be sure to lend me your views and support, as I hope to make this as interesting as possible, and please forgive me if i do not place my calls as promptly as I do need to place my own trades in the market first. A trade summary will be posted on http://systematic-trading.blogspot.com weekly and monthly to keep track of performance, where I will post all such details on my Forexyard demo account.

So see ya soon.

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