Deutsche Bank, Goldman Sachs, JPMorgan and RiskMetrics Group Introduce CreditGrades; Market-based Credit Assessment Tool Will Promote Transparency, Liquidity and Growth of Credit Markets.
The broker-dealers, leaders in the credit derivatives market, have endorsed the product to promote price transparency and create greater market depth and efficiency through an open set of tools. Ultimately, the aim is to achieve greater liquidity and assure further growth in a market that has grown annually at more than 50% over the last five years.
CreditGrades provides indicative credit spreads based on observable market quantities such as equity price history and balance sheet information and a standard set of model assumptions. The model itself is a practical implementation of the structural approach to credit risk assessment and has been used in a variety of forms by many credit market participants.
The Web site (http://www.creditgrades.com/) provides daily CreditGrades for approximately 5,000 public firms in North American and Europe. The new product includes monitoring and model sensitivity functionality, as well as technical documentation. RiskMetrics Group will market the historical CreditGrades data as part of its DataMetrics service and will integrate CreditGrades into CreditManager and RiskManager, its Web-based credit and market risk management applications.
"While there are other tools available, we felt that a simple, practical application would complement these tools well and best suit our desire to bring a greater level of transparency to the market place," said John Lovisolo, product manager for Integrated Credit Trading at Deutsche Bank.
"The credit derivatives market has not only expanded in pure notional terms, but also in the types of market participants. This expansion has intensified the need for a standard set of tools," said David Covin, product manager for credit derivatives at Goldman Sachs.
"In addition to providing additional transparency to the market, we hope CreditGrades will supply greater access to price information, augment risk monitoring, and facilitate the investigation of opportunities through the relationships between the equity and credit markets," said Andrew Palmer, a vice president and head of North American Credit Derivatives Marketing, JPMorgan.
"RiskMetrics Group has built a name in developing and promoting transparent standards in risk management. We are excited to bring our technology and research expertise to this effort," said Christopher Finger, Head of Credit Risk Products at RiskMetrics Group.
About Deutsche Bank:
With assets of over 900 billion Euro and almost 95,000 employees, Deutsche Bank offers its clients unparalleled financial services throughout the world in 75 countries. It ranks among the leaders in asset management, capital markets, corporate finance, custody, cash management and private banking. Deutsche Bank is organized in two customer-oriented Groups: "Corporate and Investment Bank" (CIB) and "Private Clients and Asset Management" (PCAM). The keys to the Bank's success remain constant: customer focus, the spirit of innovation, a broad range of product skills combined with technological power and financial strength delivered by highly skilled professionals.
About Goldman Sachs:
Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.
About J.P. Morgan Chase & Co.:
J.P. Morgan Chase & Co. is a leading global financial services firm with assets of $694 billion and operations in more than 50 countries. With relationships with over 99% of the Fortune 1000 companies, the firm is a leader in investment banking, asset management, private banking, private equity, custody and transaction services, and retail and middle market financial services. A component of the Dow Jones Industrial Average, JPMorgan Chase is headquartered in New York and serves more than 30 million consumer customers and the world's most prominent corporate, institutional and government clients. Information about JPMorgan Chase is available on the internet at http://www.jpmorganchase.com/.
About RiskMetrics Group:
RiskMetrics Group empowers institutions and their clients around the world to make better investment decisions. RiskMetrics Group's risk management and wealth management systems, services, and data are used by hundreds of leading financial institutions, multinational corporations and many of the world's central banks. Formerly a division at JPMorgan, RiskMetrics Group was spun-off as a separate company in 1998. The company has seven offices around the world, including New York, London, Tokyo, and Singapore.
Contacts: Deutsche Bank: Goldman-Sachs: JPMorgan Chase: RiskMetrics Group: Jill Olcott David Covin Michael Dorfsman John Roderick 212-469-5602 212-902-4650 212-270-7317 212-255-8455
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Contact: Jill Olcott, +1-212-469-5602, for Deutsche Bank; David Covin, +1-212-902-4650, for Goldman-Sachs; Michael Dorfsman, +1-212-270-7317, for JPMorgan Chase; or John Roderick, +1-212-255-8455, for RiskMetrics Group
Website: http://www.creditgrades.com/ http://www.riskmetrics.com/ http://www.jpmorganchase.com/