CDS IndexCo and Markit Launch the LCDX Tranches.Investors Can Now Gain or Hedge Exposure to Specific Tranches of Loan-Only Credit Default Swaps NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- 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 , CMBX CMBX Commercial Mortgage Backed Securities Index and LCDX 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, today launched the LCDX Tranches -- standardized, tradable tranches of the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. loan 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 . The LCDX Tranches will provide investors with a universe of tradable instruments that will open up a range of new trading strategies to suit individual risk appetites. For the first time, investors will be able to hedge or gain exposure to various tranches of the LCDX index through a transparent, multi-dealer product. Today was the first day of trading and it is estimated that the participating market-makers traded over $2.5 billion notional of LCDX Tranches. "The launch of the LCDX Tranches marks the next step forward in offering standardized loan credit derivatives which will promote liquidity and operational efficiency in the marketplace," said Kevin Gould, executive vice president and head of data products and analytics at Markit. "Much like the tranched CDX and ABX, the new LCDX Tranches allow investors to express an outright long or short view on a specific risk profile within LCDX, and to trade senior secured correlation both outright and against its unsecured equivalents in CDX IG and HY tranches." "We're continuing to push forward with innovations that allow investors to take more nuanced positions with respect to risk," said Brad Levy, managing director at Goldman Sachs and acting Chairman of CDS IndexCo. "Today's volume, as well as the large turnout at our investor kick-off conference call yesterday, reflects the strong demand the dealers have been seeing for these instruments." The initial series of the LCDX Tranches will reference the underlying names of the LCDX index and will comprise the same 100 reference entities in the current LCDX Series 9. Attachment points for the LCDX Tranches will be 0-5%, 5-8%, 8-12%, 12-15% and 15-100%. The 0-5% and 5-8% tranches will be quoted on an upfront basis with the other tranches quoted in spread terms. The composition will be based on the LCDX index for any given series, and the tranches will roll in line with the LCDX. Markit will act as administration, calculation, and marketing agent for the LCDX Tranches, a remit which spans pricing, analytics, operations, public relations and marketing. The investment banks launching the index and 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; 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 the LCDX Tranches, 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 is the leading provider of independent data, portfolio valuations and OTC derivatives trade processing to the global financial markets. The company receives daily data contributions from 90 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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