Credit Derivatives Product Companies, or CDPC, are a business almost solely focused on selling credit default swap

Credit default swap

A credit default swap is similar to a traditional insurance policy, in as much as it obliges the seller of the CDS to compensate the buyer in the event of loan default...

s contracts. IE, they basically sell 'insurance' against someone failing to pay back a loan ('defaulting'). CDPC are usually highly leveraged, meaning that if even a portion of their held CDS portfolio were to be 'triggered' at once, they wouldn't have the money to pay out the full resulting insurance claims. The CDPC business model is dependent on a AAA rating from a credit rating agency

Credit rating agency

A Credit rating agency is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves...

.

History

The first CDPC was Primus, in 2002.

In October 2008 Fitch Ratings

Fitch Ratings

The Fitch Group is a majority-owned subsidiary of FIMALAC, headquartered in Paris. Fitch Ratings, Fitch Solutions and Algorithmics, are part of the Fitch Group....

 withdrew its ratings on all 5 CDPCs that it had previously rated, citing in part "the uncertain business prospects for CDPCs".

List of CDPCs

Name	Date	Sponsors, Investors, related parties	CDS counterparties	Refs
Primus Financial Products	2002
Aladdin Financial Products
Athilon Structured Investment Advisors	2004 Dec	Lightyear Capital
Cournot Financial Products		Morgan Stanley, Frank Iacono
Invicta Capital	2007 Jan	Babson Capital, MassMutual
Quadrant Structured Credit Products	2007 Oct	Magnetar Capital Magnetar Capital Magnetar Capital is a hedge fund based in Evanston, Illinois. Among its many activities, the firm was actively involved in the collateralized debt obligation market during the 2006–2007 period... , Lehman Brothers Lehman Brothers Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
Pallium Investment Management		Bank of Montreal, others
NewLands	2007/2008	DeutscheBank, AXA
Structured Credit Holdings	2006 June	Aquiline, CalPERS CalPERS The California Public Employees' Retirement System or CalPERS is an agency in the California executive branch that "manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families"... , CDPQ, Calyon Calyon Crédit Agricole Corporate and Investment Bank is Crédit Agricole's corporate and investment banking entity. With a staff of 13,000 employees in 58 countries, Crédit Agricole CIB is active in a broad range of capital markets, investment banking and financing activities... , Triad, ex-employees of Radian	Morgan Stanley Morgan Stanley Morgan Stanley is a global financial services firm headquartered in New York City serving a diversified group of corporations, governments, financial institutions, and individuals. Morgan Stanley also operates in 36 countries around the world, with over 600 offices and a workforce of over 60,000.... , Bear Stearns Bear Stearns The Bear Stearns Companies, Inc. based in New York City, was a global investment bank and securities trading and brokerage, until its sale to JPMorgan Chase in 2008 during the global financial crisis and recession... , Nomura Nomura Nomura Nomura Nomura (野村 (field village), 埜村 (wilderness field) is a Japanese surname. It can refer to:-Finance:*Nomura Holdings, part of the Nomura Group (also including Nomura Securities Co.)-People:*Don Nomura (born 1957), Japanese-American baseball agent... , Natixis Natixis Natixis is a French corporate and investment bank created in November 2006 from the merger of the asset management and investment banking operations of Natexis Banque Populaire and IXIS .... , BoA BoA Boa Kwon , commonly stylized and known by her stage name BoA, which is a backronym for Beat of Angel, is a Korean singer, active in South Korea, Japan, and the United States and sometimes referred to as the "Queen of Korean Pop Music".... , HSBC HSBC HSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine... , Deutsche Bank Deutsche Bank Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets... , UBS
Bear Stearns Asset Management
Channel Capital	Early 2007	Calyon Calyon Crédit Agricole Corporate and Investment Bank is Crédit Agricole's corporate and investment banking entity. With a staff of 13,000 employees in 58 countries, Crédit Agricole CIB is active in a broad range of capital markets, investment banking and financing activities... , LBBW, Principia Partners (IT)
Koch Financial Products
Satago Financial Products
Theta Corporation
Deerfield Capital Management
Harbor Road Financial Products		Tricadia Capital Tricadia Capital -History:Tracadia Capital was formed in 2003 by Michael Barnes and Arif Inayatullah "to establish a CDO management business and pursue credit arbitrage strategies". As of 2003, Tricadia was owned by Mariner Capital, a fund of funds bond investor with $2.5 billion under management...

See also

• Monoline insurers (also dependent on a AAA rating, also sold credit default swaps)