Press release
August 26, 2009
TriOptima completes portfolio compression cycle eliminating 6850 Thomson CDS single name trades following first restructuring event under ISDA’s ‘Small Bang Protocol’
TriOptima announced today that it has completed the first portfolio compression cycle following a restructuring event under the newly-implemented ISDA ‘Small Bang Protocol’. With 28 dealers participating, 6850 Thomson single name trades with a notional value of $16 billion USD were eliminated on a net basis.
Once a restructuring credit event had been determined by the ISDA EMEA Credit Derivatives Determinations Committee, TriOptima offered its triReduce portfolio compression service as the first step in reducing the number of outstanding Thomson trades prior to an auction settlement.
““There were a significant number of European iTraxx index contracts affected by Thomson’s restructuring, which resulted in increased operational risk due to the volume of new single name contracts created. We worked in close consultation with the industry to ensure the maximum reduction in both ticket count and gross notional in advance of the auction settlement process to reduce this risk,” said Ulf Andersson, Global Business Manager for triReduce. “We are pleased that we are able to support the industry in its important efforts to achieve transparency, liquidity and operational efficiency.”
In anticipation of the Thomson restructuring credit event, TriOptima had completed a portfolio compression cycle on August 14 in European index tranches including the Thomson name, eliminating 2515 tranche trades with a notional value of $113 Billion USD. “Eliminating tranche trades prior to the auction settlement also achieves significant risk reduction,“ said Henrik Nilsson, Head of Business Development at TriOptima. “The industry is pursuing all opportunities to ensure the smooth operation of the new settlement process.”
ISDA’s ‘Small Bang Protocol’ was developed following the publishing of the ‘Big Bang Protocol’ in March 2009. The ‘Small Bang Protocol’ includes a series of amendments suggested by market participants and allows for the incorporation of auction settlement terms following a Restructuring Credit Event into standard CDS documentation.
About TriOptima
TriOptima is the award-winning supplier of technology-leveraged post trade processing services including triReduce and triResolve.
triReduce, the portfolio compression service for OTC derivative dealers, pioneers technology that eliminates risk and reduces operational and capital costs. Serving over 135 bank and non-bank subscribers worldwide including the major local and global dealers in derivatives, triReduce is a critical tool for maintaining post trade processing efficiency. triReduce offers compression cycles in single name and index CDS swaps worldwide, IRS swaps in 21 currencies and a range of energy derivatives.
triResolve is a network community service for proactive portfolio reconciliation of OTC derivative portfolios. Used by global dealers, regional banks and buy-side firms, triResolve currently handles 70-75% of all non-cleared OTC derivative transactions globally. The service benefits trade control, settlement, documentation, collateral and counterparty credit risk functions. Web-based, interactive, with advanced matching and reporting capabilities, the triResolve service reconciles all OTC derivative products, from plain vanilla to complex structures.
TriOptima maintains offices in Stockholm, London, New York, Singapore, and Tokyo. TriOptima is a privately-held company owned by its employees and directors with a significant minority interest held by ICAP plc.
For further information please contact:
Susan Hinko, Global Head of Industry Relations
Tel: + 1 646 744 0410
susan.hinko@trioptima.com
Meredith Sledd Lindquist, Global Head of Marketing
Tel: +46 8545 25 664
meredith.sledd.lindquist@triopima.com