Markit plans to launch its Markit MCDX index on May 6, an index of 50 municipal bond credit default swaps (CDS).
The index will comprise 50 equally weighted investment-grade CDSs based on municipal debt, with tenors ranging from three to 10 years. The index excludes bonds issued to pay for healthcare costs and bonds securitising income from the 1998 liability settlement agreement between US states and tobacco companies.
The London-based data provider said it designed the index to meet investor demand for a liquid and transparent tool to gain exposure to municipal bonds, at a time when credit pricing has become increasingly important to municipal bond buyers.
“The Markit MCDX index will attract new investors to the market by increasing tradability and liquidity,” said Niall Cameron, head of indexes and equities at Markit.
To ensure liquidity, the index market-makers at launch will include Citi, Goldman Sachs, JP Morgan, Lehman Brothers, Merrill Lynch, Morgan Stanley and UBS.
More on Structured Products
Risk comparisons must be made easier under Priips KID, says AMF
JAC calls on regulators to co-ordinate cost disclosure rules in KID with Mifid II
Capital-at-risk product comes with an unusually long 10-year maturity
Issuer’s capital-at-risk product with quarterly coupons reviewed
Sign up for Risk.net email alerts
Sponsored video: MarketAxess
Sponsored video: Tradeweb
Multifonds talks to Custody Risk on being nominated for the Post-Trade Technology Vendor of the Year at the Custody Risk Awards 2014
Sponsored webinar: IBM Risk Analytics
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.