Derivatives change the high-yield fabric

Cover Story

When indexes iBoxx and Trac-x merged in June to create the Dow Jones iTraxx credit derivatives index family, the event was trumpeted as a turning point for the global credit market. Some touted the new index as the holy grail for the market and predicted credit would never be the same. Market-makers and watchers alike were speculating on the impact the merger would have, discussing the liquidity that would surely enter the market and predicting what new products would emerge.

Most of this discus