A New Credit
Market Horizon

Solutions for the
Innovative Investor

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Today’s evolving market environment is creating opportunities within global credit markets.

Our solutions experts, structurers and traders share their perspectives on the current challenges and opportunities.

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Credit as an asset class continues to mature and develop and this is resulting in some very new interesting opportunities.

- Ryan O’Grady,
Head of Credit Product Development

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Learn More Below

What are the three key factors driving changes in credit investor behavior?

number-1 Created with Sketch. 1 Credit markets are increasingly commoditized in nature(displays following content on page)

Ten years ago, credit was an asset class dominated by specialists. Yet today, the advent of ETFs and passive funds has made it increasingly easy to access simple beta returns in credit. As a result, specialist credit investors are increasingly looking for ways to differentiate themselves from their competitors.

J.P. Morgan’s suite of credit solutions empowers investors to stand out with a wide range of innovative products.

Credit ETF AUM has increased by 131% since the start of 2012, with major credit ETFs now having a total AUM of $104bn. (Source: J.P. Morgan 2018)

number-2 Created with Sketch. 2 Generating
outperformance has become increasingly difficult(hides following content on page)

Today’s credit market is typified by tight spreads and low dispersion. The current environment makes it challenging for investors to meaningfully outperform with traditional approaches. As a result, an increasing number of credit investors are looking at alternative and uncorrelated sources of income.

We have invested heavily in developing solutions to meet these needs, such as our illiquid credit offering and a wide suite of risk premia strategies.

A major financing of an Italian toll road which was a record public financing transaction for a European infrastructure project, winning Transport Deal of the Year 2017 from PFI Magazine. (Source: J.P. Morgan 2018)

number-3 Created with Sketch. 3 A changing regulatory environment drives changing needs(displays following content on page)

Throughout the last five years, several new regulatory regimes have been introduced across investor types, including banks, insurers and hedge funds. These regulatory regimes have led to changing needs in credit markets, such as credit spread hedges for insurers under Solvency II.

J.P. Morgan’s credit teams have developed an array of tools and solutions designed to help clients such as insurers manage their exposures.

Our Credit Solutions

In changing markets you need an innovative partner to support your specific requirements.

J.P. Morgan is a leading market maker in corporate bonds and credit derivatives as well as a renowned innovator in credit markets. We have developed a wide range of credit solutions and products designed to allow you to continue to outperform and differentiate yourself in a changing market.

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Access Solutions

Simple and streamlined solutions for accessing the full set of tradeable products within credit markets.

  • Best-in-class Dynamic Credit Account platform allows you to access market liquidity in credit products through a synthetic trading account hosted on J.P. Morgan’s trading infrastructure, in total return swap or certificate format.
  • Structured notes provide credit exposure in a customised format, with no ISDA Master Agreement required. Investors can choose between J.P. Morgan and SPV issuance, with a wide variety of pay-offs, collateral types and issuer jurisdictions available.
  • A market leading family of Credit Investable Indices that allows investors to obtain exposure to a range of credit derivative strategies covering both risk premia and beta strategies in a simple TRS or certificate format.
  • Founding member of the SPIRE multi-dealer repack programme.

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Portfolio Solutions

A full set of tailored client solutions, building on our market leading credit flow franchise and in-house solutions expertise.

  • A dedicated solutions offering gives you the ability to analyse large credit portfolios and create highly tailored products and payoffs such as hedges and yield enhancement trades.
  • Gain access to our top tier flow franchise in products such as credit indices, corporate bonds and tranched credit while also utilizing our long-standing solutions expertise.
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New Investments

A range of new investment opportunities offering return profiles above and beyond that of traditional credit products.

  • An unmatched offering in credit risk premia strategies, offering you pre-packaged ways to access trading strategies in credit.
  • A strong presence in the illiquids and infrastructure business, with a track record of sourcing, originating and distributing real assets.
  • An ongoing commitment to the tranched credit market, encompassing both synthetic and cash portfolios.

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