Press release
September 8, 2005
TriOptima eliminates 22,562 single name credit default swaps in latest cycle; year-to-date total exceeds 70,000 terminated index and single name swaps
TriOptima, the established service for reconciling and reducing OTC derivative swap portfolios, today announced that it had completed termination cycles in both European and American single name credit default swaps (CDS) which eliminated 22,562 transactions with a combined notional principal value of $126.6 billion and a mark-to-market value of $4.7 billion. Eighteen institutions, including all the major credit derivative dealers, participated in the cycle.
The European single name cycle included 27 reference entities, and the American single name cycle included 30 reference entities. This gave dealers an opportunity to reduce CDS inventories in names such as Daimler, ABB, Rhodia, Marks and Spencer, and Telecom Italia in Europe and Ford, GM, and Delphi in the US.
Since January, 2005 over 71,000 index and single name credit default swaps with a notional value of $1.226 trillion and a mark-to-market value of $23.9 billion have been terminated in 12 TriOptima cycles. Participants have avoided almost 1 million payment events over the life of the swaps, eliminating associated operational risk and costs as well as potential legal/administrative costs if a credit event occurred.
Brian Meese, CEO, said, "Dealers recognize that terminating trades is a valuable tool for reducing the operational backlog that has accompanied the explosive growth in the credit derivatives market. We are pleased to be able to assist in meeting the operational challenges our subscribers are facing."