TriOptima compresses Irish Bank Resolution Corporation CDS trades to facilitate the post-credit event physical settlement process
04 March 2013
New York / London – March 4, 2013 TriOptima announces that it held compression cycles for both the subordinated and senior debt-related single name credit default swaps (CDS) of the Irish Bank Resolution Corporation Limited following a bankruptcy event on 7th February. The Resolution Corporation was created by the court-mandated merger in July 2011 of Anglo Irish Bank and the Irish Nationwide Building Society. Over 70% of the notional principal outstanding of subordinated debt-linked CDS and over 50% of the senior debt-linked CDS notional principal submitted to the cycles were compressed.
Although a default was acknowledged by the ISDA Determinations Committee, an auction pursuant to the European "Small Bang" was not scheduled. In response to industry interest, TriOptima offered compression cycles for both the senior and subordinated debt-linked CDS of the Irish Bank Resolution Corporation. Reducing the notional principal and number of trades outstanding in advance of physical settlement will contribute to an operationally smoother settlement process scheduled for later in March.
"Market participants were eager to minimize the challenges of physical settlement, and we were able to offer compression cycles within 48 hours of initial discussions," said Vikash Rughani, business manager for triReduce. "We were pleased to be able to support this industry initiative."
About triReduce Compression
Compression services are offered through TriOptima’s triReduce service to swap market participants with significant two-way flow. With triReduce, participants are able to tear up their existing trades at their own mid mark-to-market valuations avoiding the difficult negotiation process of bilateral termination. Multilateral terminations leverage off the expanded number of participants and result in increased numbers of terminated trades. Compression of OTC derivative trades promotes the efficient use of capital and collateral and contributes to overall financial stability.
TriOptima, an ICAP Group company, is the award-winning provider of OTC derivatives post trade risk management services including triReduce, triBalance, triResolve, and the recently-launched triQuantify.
triBalance facilitates proactive counterparty risk management by rebalancing counterparty risk exposure between multiple CCPs and bilateral relationships (in Rates, Credit and Commodities) enabling an efficient use of capital and collateral and reducing systemic risk.
triResolve is a network community service that provides counterparty exposure management services including proactive portfolio reconciliation of OTC derivative portfolios, margin call management, and dispute resolution.
triQuantify offers risk analytic models that leverage recent developments in state-of-the-art massively parallel computing devices to calculate metrics such as CVA, PFE and FVA on a global scale and with more realistic and accurate risk models.
TriOptima maintains offices in London, New York, Singapore, Stockholm, and Tokyo.
For further information please contact:
Susan Hinko, Global Head of Industry Relations
Tel: + 1 646 744 0410
Candice Adam, Argentus PR
Tel: +44 20 7397 2915