Preferred CDS Index To Launch

An index of credit-default swaps on preferred securities is set to start trading next month. PCDX will be run under the CDX credit derivatives index consortium, which currently includes indices of CDS on high-yield, investment-grade, cross-over and emerging market credits. It is being modeled on the CDX.IG.HVOL and will replace the Lehman Brothers PDX index, which started trading last September. Megan Philbin, hybrid capital trader at Lehman in New York and Lehman representative to the 11-dealer working group, said the composition of the PCDX will not be decided until about a week before its launch. It is likely to include between 40 and 60 names, she added.