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Steve,
I am not sure of any recent books, but when I began my previous career in swaps
in 1989 alot of what I did was provide swaps to new-bond issues and also
asset-swapping existing secondary market debt. If you have any specifc
questions I may be able to help.
"....that monitors the bond market to ensure that large loans are made at rates
that are profitable".
>From what I can tell from this the system that they want you to implement will
probably do the following. As an example. Take an issuer, XYZ corp. They
probably have an existing bond in the market or have access to the bond market.
They will probably issue a fixed rate bond in a particular currency paying a
coupon of R%. This bond when swapped into a floating rate (say LIBOR) will
yield a particular spread above or below this floating index. Lets say this
comes out as LIBOR+50bp for 5year. Now if this same corp asks the loan officer
at this "major bank" for a 5yr LIBOR based loan then the bank should price the
loan so that it is in line with LIBOR+50bp. If the loan officer mis-prices at
say LIBOR+25bp then clearly there will be an arbitrage vs the seconday market
(assuming bid-offer spreads on the swaps, loans and bonds are negligible).
A very simplistic example, but hopefully illustrative.
Usually these "spreads" are relatively constant for large "stable" companies,
but given the recent flight to quality spreads have ballooned in the secondary
market, even for the better credits, implying that it is more costly for a given
company to raise funds. As you can see, particularly in the current
environment, it is very important for loan departments to keep abreast of what
is happening in the primary/secondary bond markets otherwise they could end up
with mis-priced loans on their books which they cannot "sell" into the secondary
loans market.
If you are after general background info on the bond markets the book that I
went out and bought in 1990 as "Eurobonds" by Michael Bowe. There are probably
more recent books though. On the web you may want to check out "euromoney"
magazine at http://www.euromoney.com. Also there is "Institutional Investor"
magazine at http://www.iimagazine.com.
The 'bible' for the loans and bonds market is a weekly publication called "IFR"
- but is is $$$$ expensive. Its website is http://www.ifrpub.com
Hope this helps. Good luck with the contract.
Essan.
Steven Buss wrote:
> By profession, I'm a consultant specializing in the design and development
> of Oracle databases for Fortune 500 companies. I have an opportunity for a
> contract consulting gig at a major bank doing the design/development of a
> "loan system" that monitors the bond market to ensure that large loans are
> made at rates that are profitable. This is all I know about the "system" at
> this point.
>
> I've made it through the information technology/oracle-related interviews
> and I'm familiar enough with the bond futures market to make my way through
> the interview with the trading organization in general. I'm not clear
> though about the details of how financial institution lending practices are
> related to the bond market.
>
> Anyone know of a few book titles that I could look at to bone up?
>
> Steven Buss
> sbuss@xxxxxxxxxxx
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