Credit Default Swap Clearing House Inches Forward

A group of leading credit derivative market participants today announced they have joined forces to support a joint global clearing solution for Credit Default Swaps (CDS). Signatories to the letter of intent include The Clearing Corporation, Markit Group, Risk Metrics, and IntercontinentalExchange, Inc. (NYSE:ICE) through its subsidiaries, including ICE US Trust, a New York limited Trust Company (ICE Trust), Creditex and T-Zero. ICE Trust will operate as a New York limited Trust Company and function as global clearinghouse and central counterparty for CDS transactions. ICE Trust plans to become a member of the Federal Reserve System. The letter signals the intention of the signatories to use their best efforts to work together in establishing a clearinghouse that will accomplish the objectives established by the Federal Reserve Bank of New York.

New Trade Terms

"CDX North America
A portfolio of credit-default swaps of the most volatile entities contained in the Dow Jones CDX North America Investment Grade index. The
Dow Jones CDX North America Investment Grade index is a portfolio of credit-default swaps of investment grade entities domiciled in North
America. The portfolio is constructed with the objective of enhancing overall liquidity."
Covered Bond
A bond backed by specific pools of public sector loans or mortgages. It has an additional guarantee.
iHub
Hosted business communications provider
ISM
Insttitue of Supply Management
iTraxx Europe
Index of credit default swaps, collated on behalf of Markit. Tthe most liquid 125 CDS referencing European investment grade credits, subject to certain sector rules as determined by the IIC and also as determined by the SEC.

New Trade Terms

"CDX North America
A portfolio of credit-default swaps of the most volatile entities contained in the Dow Jones CDX North America Investment Grade index. The
Dow Jones CDX North America Investment Grade index is a portfolio of credit-default swaps of investment grade entities domiciled in North
America. The portfolio is constructed with the objective of enhancing overall liquidity."
Covered Bond
A bond backed by specific pools of public sector loans or mortgages. It has an additional guarantee.
iHub
Hosted business communications provider
ISM
Insttitue of Supply Management
iTraxx Europe
Index of credit default swaps, collated on behalf of Markit. Tthe most liquid 125 CDS referencing European investment grade credits, subject to certain sector rules as determined by the IIC and also as determined by the SEC.