Standardization of Coupons Sets Stage for Clearing Single Name CDS
IntercontinentalExchange(R) (NYSE: ICE), a leading operator of regulated global futures exchanges and over-the-counter (OTC) markets, announced today that its T-Zero(R) subsidiary has launched a new re-couponing service to help ready the credit default swap (CDS) industry for single name coupon standardization. T-Zero is the most widely adopted affirmation and novation consent platform for credit derivatives transactions. A press briefing will be held on Tuesday, March 24, at 8:00 a.m. ET at T-Zero’s offices located in New York City at 875 Third Avenue, 29th Floor.
Beginning April 8, the CDS market will move to a new single name Standard North American Corporate (SNAC) 100 and 500 bps coupon CDS contract. This new standardization will help prepare the market for clearing of single name trades in a manner analogous to the way CDS index contracts are now being centrally cleared by ICE Trust(TM). T-Zero’s portfolio re-couponing service will allow both dealers and buy-side firms to efficiently transition existing non-standard single name CDS positions to the new SNAC convention.
ICE and its subsidiaries, Creditex(R), T-Zero and ICE Trust, have worked closely with the International Swaps and Derivatives Association, Inc. (ISDA), regulators and market participants in designing innovative solutions to enhance a broad array of CDS risk management, execution, processing and clearing services. In the first two weeks of clearing CDS index contracts, ICE Trust has processed over $21 billion in CDS trades, compressing the aggregate exposure to $4 billion.
To RSVP for the T-Zero press briefing, please e-mail Rachel.Drakes@creditex.com or call 212.323.8510.