iTraxx launches senior LCDS index

iTraxx launched a new index for European leveraged loan credit default swaps (LCDS) today. The new index, dubbed LevX Senior, priced at 170bp last Friday after market-making banks had examined the pricing on its 35 individual constituents.

The initial price of 170bp means that buyers will receive the quoted spread over their notional when coupons are paid every quarter. However, when LevX Senior started trading at 8am this morning its price increased significantly, causing spreads to tighten.