TriOptima

• triResolve
• triReduce
  • triReduce Rates
  • triReduce Credit
  • triReduce Energy
  • triReduce Statistics
  • How it works
• Getting started
• Interest Rate Trade Reporting Repository

triReduce Statistics

TriOptima introduced the concept of multilateral terminations to the market in 2003. With the triReduce service, participants are able to tear up their existing trades at their own mid mark-to-market valuations so the difficult negotiation of a bilateral termination is eliminated; and the number of trades that are eliminated significantly increases due to the multilateral nature of the process.

The primary motivators for using triReduce are the reduction in counterparty credit risk, capital charges, risk weighted assets (RWA) on the balance sheets and operational costs and risks – all of which contribute to increased liquidity and business opportunities.

Interest Rate Swap Terminations: triReduce Rates

Currently TriOptima offers triReduce Rates termination cycles in 23 currencies (AUD, CAD, CHF, CNY, CZK, DKK, EUR, GBP, HKD, HUF, INR, JPY, KRW, MXN, NOK, NZD, PLN, SEK, SGD, THB, TWD, USD, ZAR) with over 150 regional and global dealers participating worldwide.

The notional terminated in Interest Rate Swaps almost doubled in 2009 to $26.7 trillion from $14.8 trillion in 2008 due to the economic pressures, scarcity of capital, and the need to manage RWA on balance sheets. In 2010, terminated notional continues to increase with the addition of special termination cycles for transactions within LCH Clearnet’s SwapClear.

All notional numbers are calculated single counted except for trades facing a CCP where each side of the trade is counted following market practice.

Credit Default Swap Compressions: triReduce Credit

TriOptima began offering triReduce Credit termination cycles with CDS Indices in 2005 as the need to streamline back office processing of Credit Default Swap transactions became a priority.

Although TriOptima has refined its compression process to reflect industry priorities and requirements, the results have remained the same – significant numbers of transactions and notional principal amounts are eliminated from swap portfolios. All major CDS dealers use the triReduce service.

Notionals terminated grew dramatically, peaking in 2008 at $30.2 trillion. This surge was driven both by operational concerns and by international regulatory pressure to address the rapidly increasing outstandings in CDS. In 2009, volumes decreased since the outstandings had already been reduced by half from a peak of $60 trillion in 2008 and clearing had been introduced.

TriOptima offers triReduce Credit compression cycles in: 1) CDS Indices including: ABX, CMBX, CDX, Emerging Markets, iTraxx, iTraxx Asia, and IOS; 2) Single Names for Emerging Markets and Corporates; and 3) Index Tranches. TriOptima also offers special credit event compression cycles to allow participants to eliminate as many trades as possible before an auction settlement.

In 2010, demand for compression continues to be strong despite the routing of trades to clearinghouses.

All notional numbers are calculated single counted.