Market expects Holdco CDS switch for iTraxx index

TLAC-driven issuance changes likely to see UK and Swiss holding company CDSs included in iTraxx Financials

uk swiss flags
Move driven by UK and Swiss banks' changes to comply with loss-absorbing debt requirements

Credit experts are expecting Markit to amend its iTraxx Europe Financials index to reflect changes made by UK and Swiss banks to comply with international loss-absorbing debt requirements. It could also provide a liquidity boost for the fledgling holding company (Holdco) credit derivatives contracts referencing these banks.

The credit default swaps (CDS) referencing UK and Swiss banks that are currently used in the iTraxx index reference debt issued by operating companies (Opcos). But as issuanc