While derivative product companies - essentially highly rated swap counterparties - have been around for years, the new thing is the surge in the number of such entities in the pipeline, said market participants from the various panels at the recent Information Management Network Barcelona summit.

Industry experts predicted that as many as a dozen of these companies would pop up in the near future. This shift is expected to provide a new wave of liquidity to the credit derivatives market. A number of the companies are also looking to obtain banking licenses, a step that would make them a more lucrative counterparty to entities previously constrained by red tape from working with them.

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