triReduce Credit
Relieving the pressures of explosive growth
Since 2005, TriOptima has offered compression cycles in a range of
credit default swap (CDS) transactions. Originally adopted as a tool for
dealers to manage the dramatic growth in CDS volumes and the strain in
back office processing, triReduce Credit emerged as a critical tool for
achieving significant reductions in notional outstandings in response to
significant financial turmoil.
triReduce Credit offers regular
termination cycles in single name, index and tranche swaps in EUR, JPY,
USD, and emerging markets. Supplementing the regular cycles is a series
of credit event management services that facilitate the clearing and
settlement process in the case of a default.
In the fall of 2008,
TriOptima offered a series of special credit event cycles for the
Icelandic banks, Freddie Mac and Fannie Mae, Lehman Brothers and other
distressed names. More recently, TriOptima assisted the market by
offering special credit event cycles for the French electronics maker
Thomson and for the Japanese financial company Aiful, both of which were
firsts under the ISDA “Small Bang” Protocol.
From
2005 through the end of 2009, TriOptima eliminated $60.2 trillion in CDS
notional principal from the OTC derivatives market. In 2008, by
eliminating $30.2 trillion in notional in a single year, the total
outstandings in CDS transactions was halved. TriOptima remains active
in CDS compression especially with the introduction of the recouponing
efforts for European single name CDS transactions.