New deals for corporates

Riding the tiger of volatility

Here come the insurers

A world of exotic delights

It’s not just the retail market for equity-linked structures that’s booming. During the 1990s, some of the worst derivatives scandals surrounded the investments that broker-dealers had sold to corporates, including Procter & Gamble and Yakult.

But now the derivatives deals done for corporate clients are different. Many relate to M&A activity. For example, failed takeover bids can leave unwanted holdings behind. And although in most countries bidders are not allowed to trade in their target during a takeover, there is little to stop them taking out a sneaky hedge before they build up a stake.