Repacks revisited: Asia investors turn to structured credit

As Asian investors continue the hunt for yield, dealers report an uptick in the credit repack business as regulation, funding and yield targets collide

The credit repack business used to be an example of financial innovation at its most creative as dealers used the flexibility of repackaging different underlyings to provide a bespoke product to investors unable either to purchase the underlying asset or to enter into a derivative transaction on their own account, typically for tax, accounting or regulatory reasons.

The onset of the 2008 financial crisis and the bankruptcy of Lehman Brothers, however, triggered defaults of the highly leveraged