CDS IndexCo and Markit Launch Loan Credit Default Swap Index.LCDX, a Credit Derivative Index, Allows Investors to Go Long or Short U.S. Leveraged Loans NEW YORK -- CDS IndexCo LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("CDS IndexCo"), a consortium of 16 investment banks licensed as market makers in the ABX ABX Antibiotics ABX Airborne Express ABX Abstracting ABX Albury, New South Wales, Australia - Albury (Airport Code) ABX Automatic Branch Exchange ABx Non-Antibiotics ABX Asset Backed Securities Index ABX Acoustic Bass Extension , CDX CDX Companion Dog Excellent (AKC Obedience Title) CDX Cyber-Defense Exercise CDX Central Data Exchange CDX Community Development Exchange (UK community development organization) CDX Commercial Data Exchange and CMBX CMBX Commercial Mortgage Backed Securities Index indices, and Markit Group Limited ("Markit"), the leading provider of independent data, portfolio valuations and OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). derivatives trade processing to the global financial markets, announced today the launch of LCDX, a credit default swap index A credit default swap index is a credit derivative used to hedge credit risk or to take a position on a basket of credit entities. Unlike a credit default swap, which is an over the counter credit derivative, a credit default swap index is completely standardised credit referencing U.S. leveraged loans. The index will provide investors with the ability to hedge or gain exposure to the leveraged loan market in a transparent, standardized and efficient manner. LCDX will start trading on May 22, 2007, and will trade based on the North American Loan Credit Default Swap Credit Default Swap A swap designed to transfer the credit exposure of fixed income products between parties. Notes: The buyer of a credit swap receives credit protection, whereas the seller of the swap guarantees the credit worthiness of the product. (LCDS) contract. LCDX comprises a basket of 100 credit default swaps referencing first-lien loans. Deliverable obligations will consist of first-lien loans as defined by Markit RED Loans in accordance with its Syndicated Secured List for North America. RED Loans confirms reference entities and the key identifying information for credit agreements, loan facilities and loan tranches. As with the CDX and iTraxx credit derivative indices, the LCDX index will roll every six months. It will trade with a five-year coupon, and additional maturities will be added in due course. Only Failure to Pay and Bankruptcy will be treated as credit events. Brad Levy, Managing Director, eBusiness Group at Goldman Sachs and acting Chairman of CDS IndexCo, said: "LCDX is the first widely supported Loan CDS index in North America, and its launch has been keenly anticipated by the marketplace. It will provide institutional investors with a unique tool for participating in the leveraged loan markets in an unfunded manner, and will boost the growth and liquidity of the nascent Loan CDS market." "Markit has worked closely with the loan dealer community to create an index that is truly tradeable and transparent," commented Tom Price, Managing Director and Head of Loans and CDS at Markit. "We believe that LCDX will satisfy investor demand for access to U.S. leveraged loans through a liquid, synthetic product." Markit will act as administration, calculation, and marketing agent for LCDX, a remit which spans capturing daily price fixings; handling operations, marketing, and analytics; negotiating dealer and data licenses; and communicating information to the wider market. The investment banks launching the index acting as market-makers are: Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. ; Barclays Capital; Bear Stearns; BNP Paribas; Citigroup; Credit Suisse; Deutsche Bank; Goldman Sachs; JPMorgan; Lehman Brothers; Merrill Lynch; Morgan Stanley; and UBS UBS Union Bank of Switzerland UBS United Bible Societies UBS United Blood Services UBS United Buying Service UBS Used Bookstore UBS University Business Services UBS Universal Building Society (UK) UBS Ulaanbaatar Broadcasting System . For information on LCDX, see www.markit.com or contact: CDS IndexCo Michael Mandelbaum Tel: +1 310 785-0810 Email: michael@mandelbaummorgan.com Markit Teresa Chick Tel: +44 20 7260 2094 Email: teresa.chick@markit.com About CDS IndexCo CDS IndexCo is a consortium of 16 investment banks which are licensed as market makers in the ABX, CMBX and CDX indices. The market makers include: ABN AMRO, Bank of America, Barclays Capital, Bear Stearns, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC HSBC Hongkong and Shanghai Banking Corporation HSBC Humane Society of Broward County (Florida) HSBC Humane Society of Bay County (Bay County, Michigan) , JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, UBS, and Wachovia. About Markit Markit Group Limited is the leading provider of independent data, portfolio valuations and OTC derivatives trade processing to the global financial and commodities markets. The company receives daily data contributions from over 80 dealing firms, and its services are used by almost 1,000 institutions to enhance trading operations, reduce risk and manage compliance. For more information, see www.markit.com. |
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