Trading Initiative Of The Year Award
Creditex and Markit Win Risk Magazine's Trading Initiative Of The Year AwardLondon and New York, 2nd February 2006 - Creditex Inc. ("Creditex"), the global market leader in e-trading of credit derivatives, and Markit Group Limited ("Markit"), the benchmark industry source of independent mark-to-market pricing, valuations, dividend forecasting and index services, are pleased to announce they have won the Risk Magazine ("Risk") Trading Initiative of the Year Award for developing the Credit Event Fixings.
Recognised by Risk as 'a watershed in the development of the credit market', the Credit Event Fixings are a joint Creditex / Markit initiative, run in close cooperation with major credit derivatives dealers.
The Credit Event Fixings are auctions to determine cash settlement prices for credit derivative index trades following a corporate bankruptcy, and are designed to ensure a transparent and fair price representative of the trading market level, for use in the settlement of credit derivative index trades.
During a Credit Event Fixing, dealers place executable orders on the Creditex platform for obligations of a particular company that has undergone a credit event, such as filing for bankruptcy. A market standard methodology is used to simultaneously execute these orders and generate a final cash settlement price for eligible credit derivative contracts referencing this entity. Markit verifies the integrity of the process and calculates the final price which it publishes to a freely accessible web page located at www.creditfixings.com.
In 2005, this initiative was selected to settle trades referencing the defaulted U.S companies Collins & Aikman, Delta Air Lines, Northwest Airlines, Delphi and Calpine.
The Fixings are credited with preventing potential settlement problems, as highlighted by Tim Frost, Director of Cairn Capital, who said: "The market would have ground to a halt had the credit fixings initiative not established such a visible and transparent process for settlement."
The Credit Event Fixings were born from the Tradeable Credit Fixings which launched in March 2005 for the three most liquid iTraxx indices: the 5yr Europe, HiVol and Crossover indices via a weekly online auction on the Creditex platform. Dealers submit executable two-way prices which are verified by Markit. The Fixings have spurred the development of second generation credit derivative products which depend on a market-supported reference rate.
Kevin Gould, Executive Vice President of Markit and Head of Data Products and Analytics, said: "The Fixings are evidence of the importance the market accords efficient cash settlement of credit derivative trades. We are happy to have been able to help the market tackle last year's credit events while helping prevent undue pressure on dealers' trade processing capabilities, and we're delighted that Risk has recognised our efforts over the last year."
Mazy Dar, Head of Strategy and Electronic Platforms at Creditex, said: "The Credit Event Fixings are the result of an unprecedented cooperative effort with the credit derivatives dealer community. We are very pleased to have worked closely with the major banks on this important initiative and we are delighted that it has been recognized as Risk's Trading Initiative of the Year. Credit Event Fixings will continue to play a crucial role in the credit derivatives market going forward."
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For further information, please contact:
Mazy Dar +44 (0)20 7429 3030
Annette Bronkesh +1 973 778 8648
Kevin Gould +1 212 931 4901
Teresa Chick +44 (0)20 7890 5094
Creditex is the global market leader in e-trading of credit derivatives. The first e-trading platform in credit derivatives, Creditex is used by more than 800 credit derivatives traders at the world's top financial institutions. The platform has electronically executed over $ 0.5 trillion notional in credit default swap (CDS) indices, single-name CDS and standardized structured credit products. In 2005, Creditex pioneered the first Tradeable Credit Fixings, a milestone in bringing additional confidence and transparency to the market by providing a standard benchmark and settlement rate. The firm is also leading the industry in "straight-through processing" initiatives, allowing its growing client base to reduce operational risk and transaction costs. Having received numerous accolades in leading financial media including Credit, Euromoney, Forbes, Institutional Investor and Risk, Creditex's technology continues to set the standard for innovation in the credit derivatives market.
Markit is the benchmark industry source of independent pricing and valuations for the global financial and energy markets. Markit has data contributed by over 50 dealing firms, and its services are used by 400 institutions globally. Areas of product expertise include OTC derivatives (credit, equity, FX, rates, inflation, energy, power, metals and structured products), corporate bonds, syndicated loans, dividend forecasting, and index and ETF management. Markit has most recently brought price transparency to the European asset-backed securities market with the launch of the first independent ABS pricing service. Markit's position in the derivative markets has been acknowledged by the industry with awards from Risk Magazine for Trading Initiative of the Year 2006 (Credit Event Fixings); ISR's Editor's Award for Innovation 2005; IFR's Innovation of the Year 2005 (Credit Event Fixings); Financial News' Best Derivatives Data Provider 2005; and Institutional Investor's Operations Management Award for Vendor of the Year 2005 (RED). For more information about Markit, see www.markit.com.