LONDON - The commercial bank Abbey National PLC and investment bank Baring Brothers & Co. said they agreed to form a joint venture to provided risk-management services in the currency and interest-rate swap and option markets.
Swaps and Options
The new operation, to be called Abbey National Baring Derivatives, will be established as a branch of Abbey National Treasury Services, a wholly owned division of Abbey National, at Baring Brothers' London offices.
Abbey National said the venture has been 18 months in preparation and should be able to start trading next month.
Initially, it will offer interest rate and currency swaps, interest rate options and swap options in pounds sterling, dollars, German marks, and other main currencies of Organization for Economic Development and Cooperation nations.
Use of Bank's Credit Ratings
Abbey National said it will fully and unconditionally guarantee the obligations into which the venture enters, giving it the benefit of the commercial bank's credit ratings.
Currently, those are AA by Standard & Poor's Corp. and Aa2 by Moody's Investors Service Inc.