The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Credit derivatives: S&P to launch CDS indices

Can the index provider’s expertise in equity markets translate into fixed income?

Standard & Poor’s intention to launch its own family of credit default swap indices has been met with some scepticism from the market about the likely success of the new product.

The announcement comes just weeks after Markit Group, which is owned by a consortium of 16 banks, snapped up CDS IndexCo and the International Index Company, thus consolidating most of the best-known and widely used CDS index products in one company and, ultimately, under one brand name.

"It will be very hard to get people to trade [the S&P indices], especially given volumes in which the current contracts already trade," says a London-based credit derivatives banker. "They might try to get this to trade on exchange. The exchanges are looking for indices to trade, maybe not in Europe but in the US."

S&P will introduce three US-focused CDS indices in the first quarter. There will be the S&P US Investment Grade CDS index, the S&P US High Yield CDS index and the S&P 100 CDS index.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to Euromoney.com and Asiamoney.com analysis and receive expertly-curated updates direct to your inbox.

 

Already a user?

Login now

 

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree