New index taps into ABSs

New angles

CDS IndexCo and Markit have teamed up to launch a synthetic asset-backed securities (ABSs) index of US home equity ABSs. The index, called ABX.HE, formally started trading on January 18 and dealers report that business has been brisk, with roughly $10 billion notional having traded in the first five days.

Work began on the index early last year, when the single-name ABS credit default swap (CDS) market began to gather pace, and dealers hope the increased transparency and liquidity of the ind