Leveraged on European 'junk'
Daiwa Europe took the greenfield approach to the credit business. It recruited 40 staff with varied backgrounds from different firms and built from scratch a kind of credit-processing station. In one end goes a range of assets that are then repackaged and sent out in different forms.
"Whatever asset comes into the Daiwa structured finance group, we always recharacterize the risk, whether through swapping, tranching, enhancing, repackaging. It never leaves in the same shape it came in," says managing director Robin Nydes, who has built the group up since he joined Daiwa from Bankers Trust a year ago.
Using this approach, the bank was able to sell high-risk Russian treasury bills to cautious Japanese investors and repackage Turkey's samurai bonds as Deutschmark Eurobonds taking advantage of different perceptions of Turkish debt in Tokyo and Frankfurt. In a different kind of deal, Daiwa outbid rivals for a...
