Allen & Overy LLP today announced the launch of CDS deliverability, a tool that will offer the CDS market an indicator of deliverability for the growing universe of frequently traded reference obligations.
The online service will bring greater transparency and efficiency to the credit derivatives markets by providing rigorous legal analysis of deliverability made available in a one-page report for each obligation. Historically market participants have conducted this analysis on a unilateral basis, duplicating effort and cost without the benefit of a recognized market standard.
CDS deliverability has been developed in association with Markit, the leading provider of independent data, portfolio valuations and OTC derivatives trade processing to the global financial markets. Mutual clients of Markit RED and CDS deliverability will be able to access deliverability reports directly through the Markit website.
Simon Haddock, head of Allen & Overy’s Derivatives and Structured Finance practice said: "Quick and efficient mechanisms for delivery of both legal and market data are an integral part of the commoditization of the credit markets. The market has long sought a cost-effective and timely indicator of deliverability for frequently traded obligations. CDS deliverability has been produced to satisfy that demand based on feedback from a number of leading dealers in the credit markets."
"The launch of CDS deliverability is a welcome next-step in the move towards greater legal and operational efficiency in the credit derivative markets, and we are pleased to have partnered with Allen & Overy in this initiative. The CDS deliverability tool will provide our clients with valuable information that will add clarity and confidence to CDS trading", added Ed Chidsey, director of Markit RED.
CDS deliverability covers the iTraxx Europe index series 7 and 8 at present, and will include future rolls to this index. The product will be expanded to cover the weekly rolls to the Markit Preferred Reference Obligations list shortly.
CDS deliverability is the latest addition to the suite of products offered by Allen & Overy LLP’s affiliates, including the award winning netalytiics and CSAnalytics, which are used by over 65% of leading derivative dealers and brokers, and the recently launched pre-insolvency enforceability resource, diligence.
