Bond Trust has been at the forefront of cross border structured finance markets in greater China. Our professionals have strong research, banking, and trading experience in the ever evolving fields, which have resulted in some spectacular rise and failure of investment banks. Always put customers’ interest first, we have managed to steer our customers clear of many pitfalls that have failed large international banks. Our customized and independent advice is much sought after by many financial institutions and corporations.
Structured Investments allow sophisticated investors to obtain appropriate risk and return profile not easily achievable through plain vanilla fixed income or equity investments.
Structured Fixed Income Investment typically offers investors higher yield in exchange for some measured risks linked with interest rate (e.g. Libor Range Accrual Note, or CMS Spread Accrual Note), foreign exchange rates (e.g. Dollar/Yen Range Accrual Note), and credit risk (e.g. the infamous CDOs).
Structured Equity Investment typically involves investors shorting certain options in exchange for some premium upfront. Equity Linked Notes which offer investors high coupon return unless the equity price drops substantially below certain threshold have been popular in a bull or range bound markets. Leveraged exposure investments, such as the infamous Accumulator, has lost billions for high network investors and given structured products a bad name.
After excessive risk taking in 2004-2007 periods, investors have been forced take large write-downs which have resulted in the closure of well known firms such as Bear Stearns and Lehman Brothers in 2008. Many investors and banks were busy cleaning up and restructuring existing portfolios after the 2008 financial crisis. Structured finance has come back to the basics: simple CLOs in place of CDO squares; simple senior subordinated structures in place of complicated kitchen-sink structures. The domestic China securitization markets have experienced strong growth, and have become the largest in Asia. We expect more opportunities for international institutional investors in the China domestic and cross-border structured finance markets.
