Three investment banks behind credit default swap (CDS) index provider iBoxx – ABN Amro, Citigroup and Deutsche Bank – today jointly announced the development of a new credit futures contract.The product has been in development for six months and work is still in progress, according to officials. It will come on to the market next year, though no date for its release is currently available – it depends on the outcome of forthcoming consultations with other banks being carried out over the coming weeks.
The contract will be linked to a basket of CDS instruments, though the exact details of these will be the subject of discussions at the consultations. It is designed to give investors exposure to a diverse portfolio of credit.
Officials representing the consortium said it would add breadth to the credit derivatives market, boost liquidity and bring in new investors.
The futures contract is the latest in the series of iBoxx products, and developers hope the brand’s existing reputation will encourage investors to take up the product.
“The iBoxx family of products will gain an important addition with the introduction of the new credit futures contract,” said Alan Shaffran, head of European credit derivatives at Citigroup.
More on Structured Products
ECB rate cut to drive modest recovery in eurozone
Correlation sensitivity in multi-asset structured products explained
UK investors offered autocallable in conservative or bullish versions
Schlumberger product puts capital at risk if American barrier is breached
Sign up for Risk.net email alerts
Nominated for two technology awards
Nominated for post trade technology award
Sponsored webinar: Collateral and counterparty tracking
Isda directors warn on fragmentation, access and liquidity - but expect problems to pass
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.