enhancing portfolio efficiency
With TriOptima support, the industry has been able to achieve significant reductions in credit defaut swap (CDS) outstandings. Now that notionals have been reduced dramatically, TriOptima continues to support efforts to enhance portfolio efficiency.
Launched in 2005 after the introduction of triReduce Rates, CDS compression cycles accelerated to meet growing demand. Characterized by the TriOptima hallmarks of flexibility and adaptability, triReduce Credit has evolved to meet the priorities of its subscribers as market conditions and the regulatory landscape changed.
$77 trillion and counting
triReduce Credit cycles were the key to reducing notional outstandings when the regulatory community became concerned about the explosive growth in CDS. Through December 2012, over $77 trillion in CDS notional has been eliminated. In 2008 alone, the notional outstanding in the market was reduced by 50% from a peak of $62.2 trillion, with triReduce Credit responsible for eliminating $30.2 trillion.
Meeting industry commitments
In order to aid the industry in achieving standardization and clearing targets, TriOptima offers recouponing cycles in existing single name trades while continuing to schedule compression cycles in investment grade credits. Standardization cycles will be extended to emerging market single name CDS and index tranche trades in the near future. And we do this all without increasing gross notionals.
Compression cycles for both TABX, the benchmark index tranche product in CDS of ABS, and for IOS, a synthetic total return swap index referencing the interest component of 30-year, fixed-rate Fannie Mae agency pools demonstrate TriOptima’s continuing collaboration with the industry to introduce service innovation.
TriOptima has always understood the importance of interoperability to its clients; and all our triReduce Credit services interoperate with DTCC’s Trade Information Warehouse to save our clients time and effort.
Credit event management
TriOptima has always assisted the industry in meeting the challenges of the credit default swap market from the first special credit default event cycles with the bankruptcy of Delphi through the credit event cycles for Lehman, the Icelandic banks, and Fannie Mae among others. Since the recent ISDA “Small Bang” protocol was implemented, TriOptima has completed special credit event cycles for the French electronics maker Thomson and the Japanese financial company Aiful during the companies’ restructurings.
triReduce credit cycles
iTraxx Asia ex-Japan
iTraxx Greater China
iTraxx Rest of Asia
Interest Rate Trade Reporting Repository
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