FT Interactive Data to Offer Independent Valuations of Credit Default Swap Index Trades
June 21 2006 - 7:30AM
Business Wire
Expands Breadth of Derivatives Data to Help Clients Value Diverse
Portfolios FT Interactive Data, an Interactive Data (NYSE: IDC)
business and a leading supplier of financial information to global
markets, today announced that it will offer seamless access to
independent valuations of credit default swap (CDS) index trades,
helping clients value their increasingly diverse derivatives
portfolios more effectively. According to the International Swaps
and Derivatives Association (ISDA), the notional amount of credit
default swaps outstanding around the world increased 105 percent to
$17.1 trillion from 2004 to 2005. As the size and value of credit
derivative portfolios continue to grow and new investors enter the
market, many are seeking greater liquidity, convenience and
efficiency. Investing in CDS index products can help clients better
manage their risk exposure by providing them with a diversified
portfolio of CDS in a single transaction. The interest in CDS index
products is reflected in data gathered by FitchRatings, which
estimates that the growth from 2004 to 2005 was 127 percent for
U.S. dollar-denominated CDS index trades and 212 percent for
Euro-denominated CDS index trades. FT Interactive Data's new CDS
index valuation service, which is now available, facilitates the
automated delivery of independent valuations of CDS trades linked
to the Dow Jones CDX(TM) and iTraxx(TM) families of indices through
an add-on to FT Interactive Data's evaluation services or as a
module of its FTS(TM) online portfolio administration service.
Valuations for these index trades are based on information that
Markit Group Limited ('Markit') gathers from more than 60 major
dealers in the CDS markets. The new offering complements FT
Interactive Data's previously announced service for the delivery of
single-name CDS valuations
(http://www.ftinteractivedata.com/news_events/press_releases/
2006/03/21.shtml). The CDS index valuation service represents
another new offering developed through FT Interactive Data's
strategic alliance with Markit, a leading provider of independent
pricing, reference data, portfolio valuations and OTC derivatives
trade processing to the global financial and commodities markets.
"We believe that many investors have been increasingly interested
in CDS index products because of the range of benefits that they
offer, such as increased liquidity and efficiency," said Ray
D'Arcy, president of sales, marketing and institutional business
development, Interactive Data Corporation. "The new service enables
FT Interactive Data to provide clients with a broader set of data
to help them more effectively value their credit derivatives
portfolios." "By combining the delivery of independent valuations
of single name CDS and CDS index trades, FT Interactive Data can
offer its clients a more complete set of information about the
credit derivatives market," said Mike Rushmore, executive vice
president of Markit Group. "We are very pleased with the continued
development of our relationship with FT Interactive Data, and
believe that our work together will help firms meet their goals
more efficiently." The Dow Jones CDX and iTraxx indices, which
track segments of the CDS markets around the globe, are valued
daily and rebalanced every six months. Markit is the exclusive
calculation agent for the Dow Jones CDX and iTraxx indices. Through
its alliance with Markit, FT Interactive Data will make both
current and historical valuations of CDS trades linked to the Dow
Jones CDX and iTraxx indices available to clients. Additional
information about these indices is available at
www.djindexes.com/mdsidx/?event=cdx and www.itraxx.com. About
Interactive Data Corporation Interactive Data Corporation (NYSE:
IDC) is a leading global provider of financial market data,
analytics and related services to financial institutions, active
traders and individual investors. The Company's businesses supply
time-sensitive pricing, evaluations, dividend, corporate action and
reference data for more than 3.5 million securities traded around
the world, including hard-to-value instruments. Many of the world's
best-known financial service and software companies subscribe to
the Company's services in support of their trading, analysis,
portfolio management and valuation activities. Through its
businesses, FT Interactive Data, ComStock, CMS BondEdge and
eSignal, Interactive Data has approximately 2,200 employees in
offices located throughout North America, Europe, Asia and
Australia, and is headquartered in Bedford, MA. Pearson plc (NYSE:
PSO; LSE:PSON), an international media company, whose businesses
include the Financial Times Group, Pearson Education, and the
Penguin Group, owns approximately 62 percent of the outstanding
common stock of Interactive Data Corporation. FT Interactive Data
provides global securities pricing, evaluations, dividend,
corporate action and reference data designed to support financial
institutions' and investment funds' pricing activities, securities
operations, research and portfolio management. FT Interactive Data
collects, edits, maintains and delivers data on more than 3.5
million securities, including daily evaluations for approximately
2.5 million fixed income and international equity issues. FT
Interactive Data specializes in 'hard-to-value' instruments and
'hard-to-get' information from emerging markets. Evaluated pricing
is provided in the U.S. through FT Interactive Data Corporation and
internationally through Interactive Data (Europe) Ltd. and
Interactive Data (Australia) Pty Ltd. For more information, please
visit www.interactivedata.com.
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