S&P Dow Jones Licenses 3 New Credit Spread Indices to trueEX

S&P Dow Jones Indices announced the launch of three new credit spread indices based upon the S&P 500 along with a licensing agreement with trueEX, an electronic swaps exchange that will create and trade futures contracts based on the new indices. Under the agreement, trueEx, a Dodd-Frank compliant electronic exchange, will be the first to create futures contracts based on the new credit spread indices, allowing the young exchange to be the first to offer exposure to corporate credit spreads, according to today’s release. The three new credit spread indices launched today include: S&P/ISDA U.S. 150 Credit Spread Index, the S&P/ISDA U.S. Corporate 120 Credit Spread Index, and the S&P/ISDA U.S. Financial 30 Credit Spread Index.

“Investors have longed for a transparent and standardized way to express views on credit spreads of the largest and most liquid corporate and financial debt issuers in the U.S.,” commented Sunil Hirani, CEO of trueEX. “There is a huge unmet investor demand for Investment Grade indices that are rule-based, independently managed, and based on corporate-debt issuance. There is also a gaping hole in the availability of indices based on financial debt issuers. trueEX has created a contract which will provide a transparent, standardized way for the global investor community to express its view on corporate credit spreads in futures form – something that has never been offered before.”

The S&P/ISDA U.S. Corporate 120 Credit Spread Index is based on the largest and most liquid 120 corporate investment grade issuers of long-term debt outstanding in the S&P 500. The S&P/ISDA U.S. Financial 30 Credit Spread Index is based on the largest 30 financial investment grade issuers of long-term debt outstanding in the S&P 500. Together, the indices will comprise the S&P/ISDA U.S. 150 Credit Spread Index.

“The S&P/ISDA credit spread indices provides investors with a clearly defined, independently calculated, and rules-based family of indices to measure this important segment of the market,” commented JR Rieger, VP of Fixed Income Indices at S&P Dow Jones Indices. “We are excited to have licensed our indices to trueEX for the creation of futures contracts, the first to offer exposure to corporate credit spreads.”

trueEX will be launching a series of futures contracts on S&P Dow Jones Indices’ credit spread indices, based on CFTC approval. According to trueEX LLC, it is the first swaps exchange approved by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM). trueEX was designed from the ground up as the first Dodd-Frank compliant exchange, the company stated in its release.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio