The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

All I want for Christmas is some triple-B CMBS

For those senior bankers bemoaning the fact that they were not awarded a bonus this year take heart – things could be worse. You could be working for Credit Suisse.

The good news is that the Swiss bank decided to pay employee bonuses for 2008. The bad news is that they decided to pay them with illiquid leveraged loan and CMBS debt that no-one else will touch with a bargepole.

In something of an understatement, investment banking chief executive officer Paul Calello admitted in an internal memo that the solution “might not be ideal for everyone”. But the bank should be commended for its fresh approach to the concept – making bonuses something that employees actually want to receive is just so last year. The scheme applies to managing directors and directors only but who gets what remains a mystery. Maybe securities backed by city-centre buildings with solvent highly rated tenants are being reserved for blameless managers in wealth management. If so those in structured finance and leveraged finance should brace themselves for a deluge of triple-C paper backed by deserted shopping malls in nowheresville, Tennessee (staff will actually be given equity stakes in a dedicated fund).

According to the memo the ultimate value of the bonuses that employees receive will be determined over the next eight years “as the loans and securities mature or default” – not exactly a ringing endorsement of their quality.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree