The Deutsche Boerse will add sub-indices for sterling-denominated, non-gilt government bonds, state-guaranteed bonds, collateralized bonds and corporate bonds to its sterling-denominated iBoxx index family by year-end, says Andreas Brunner, a member of the Deutsche Boerse's index team in Frankfurt. Sterling-denominated government indices debuted earlier in the year.
Brunner says the new indices will be constructed in conjunction with its partners ABN Amro, Barclays Capital, BNP Paribas, Deutsche Bank, Dresdner Kleinwort Wasserstein, Morgan Stanley and UBS Warburg. Kai Silbach, head of index marketing at the Deutsche Boerse, says marketing of the Sterling corporate indices has not yet officially started, but feedback from the market so far has been positive. One of the benefits of the indices'will be to bring more transparency to the Sterling corporate market, according to Silbach.
One industry consultant said she had not heard of too many investors using the iBoxx indices so far, but she was aware of a few studying them closely.
The iBoxx Sterling Collateralized indices and the iBoxx Sterling Corporate indices will be subdivided according to market-specific practices, said Brunner. For example, the iBoxx Sterling Collateralized indices will contain the iBoxx Sterling ABS/MBS index and the iBoxx Sterling Pfandbrief index. Corporate sector sub-indices will be arranged by market sector, which will be subdivided into financials and non-financials.
The indices will include plain-vanilla bonds, zero bonds, callable bonds, redemption bonds, step-up/callable bonds, bonds with fixed- and floating-rate coupons as well as event-driven bonds.