By Joti Mangat
The securitization new-issue market might be enjoying record volumes but its secondary market has lagged behind the wider credit sector in having effective mechanisms for hedging. Three new platforms began to emerge in January, starting with the CDS Index Company/Markit-created ABX, an index of CDS on US ABS.
ABX comprises five indices of CDS on US sub-prime RMBS sorted by rating from Aaa to Baa3, each containing 20 reference entities. Fifteen market makers, both European and US, will contribute prices.
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