Derivs - Credit

Bloomberg has launched a facility that links the buyside and the sellside of the credit default swaps market with ICE U.S. Trust and CME Clearing in one portal.

Credit spreads in the peripheral euro zone countries widened sharply this week, pushing the Markit iTraxx SovX Western Europe index wider than the Markit iTraxx Europe index for the first time. This implies that European sovereigns are more risky than corporates.

The credit event triggered by the debt restructuring of Japanese lender Aiful has prompted the International Swaps and Derivatives Association to introduce a protocol that will standardize certain provisions of legacy single name Japanese corporate credit default swaps.

Michel Barnier, EU internal market commissioner-designate, who will lead derivatives regulation in Europe, told European ministers in Brussels this afternoon that regulation of over-the-counter derivatives market will not be delayed if the U.S. and Asian authorities haven’t implemented similar regulation by year-end.

Liquidity in emerging market credit default swaps was higher than that of developed markets towards the end of last year, according to the latest Global CDS report from Fitch Solutions.

UBS has picked up a number of senior credit staffers formerly at Credit Suisse as it looks to expand its trading capabilities in distressed names.

Sunil Hirani, founder of Creditex, the interdealer broker and technology platform sold to IntercontinentalExchange in 2008 for USD513 million, is leaving ICE to focus on new entrepreneurial opportunities.

Rumit Mehta, a senior credit default swaps trader in industrials at BNP Paribas in London, has left the firm.

Standard & Poor’s has launched an index of credit default swaps referencing U.S. homebuilder names.

JPMorgan, Scotia Capital, Bank of America and Citigroup are among banks pitching to investors total return swap programs that would act as warehouse lines for collateralized loan obligations. The move is the latest sign of the return of the CLO market.

Japanese lender Aiful’s credit default swap settlement auction could impact pricing for other names. “If Aiful’s CDS final price is set at a very low level, it could be a factor for widening,” said Junichi Shimizu, credit research analyst at Deutsche Bank in Tokyo.

Market participants are nearing completion of the new bullet, or non-cancellable, loan-only credit default swap contract after more than a year of debate. A call was held yesterday to discuss the draft, which could be formally introduced by the end of this quarter.