iBoxx developing 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.

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