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CDX Indices Add Fitch to Eligibility Criteria
New York – March 8, 2007 – CDS IndexCo LLC (“CDS IndexCo”), a consortium of sixteen investment banks licensed as market makers in the CDX indices, today announced that it has added Fitch Ratings as a determinant for an entity’s inclusion in the indices, in addition to Moody’s and Standard & Poor’s.
This change to the inclusion rules governing CDX, the widely traded family of credit derivative indices, will take effect on the next index roll on March 20, 2007.
Brad Levy, Managing Director, Firmwide eBusiness Group at Goldman Sachs and acting Chairman of CDS IndexCo, said: “CDS IndexCo has added Fitch Ratings to the CDX index composition methodology in order to make name selection more robust by including ratings from all three major rating agencies. The CDX indices are the most widely traded synthetic indices in North America and the universe of traded names in the credit derivatives market has grown dramatically since the launch of CDX. We will continue to refine the selection methodology to promote the liquidity and transparency of the indices.”
The CDX family of credit derivative indices allows investors to buy and sell protection against default on a broad range of corporate and sovereign entities domiciled in North America and the Emerging Markets. Indices include CDX.NA.IG (Investment Grade), CDX.NA.IG.HVOL (High Volatility), CDX.NA.XO (Crossover), CDX.NA.HY (High Yield), CDX.NA.HY.BB (High Yield, BB), CDX.NA.HY.B (High Yield, B), CDX.NA.HY Notes (High Yield Notes) and CDX.EM (Emerging Markets).
The CDX indices roll every six months in order to rebalance the portfolio. Index composition is selected by a dealer poll conducted by Markit Group Limited, the independent data provider responsible for the calculation of CDX and the administration of CDS IndexCo.
“It is evident that across all asset classes and geographies, investors and issuers benefit from having choice among rating agencies - from better transparency of the ratings process and better surveillance of ratings to a consensus view of credit risk,” said the Head of Fitch Ratings Business Development, Peter Jordan. “The acceptance of Fitch Ratings by important global institutions is an indication of how market participants have re-examined the way they look at ratings and the major rating agencies.”
For more information about the CDX indices see www.markit.com or contact:
CDS IndexCo
Michael Mandelbaum
Tel: +1 310 785-0810
Email: michael@mandelbaummorgan.com
Fitch Ratings
James Jockle
Tel: +1 212 908 0547
Markit
Teresa Chick
Tel: +44 20 7260 2094
Email: teresa.chick@markit.com
Note to Editors:
About CDS IndexCo
CDS IndexCo is a consortium of 16 investment banks which are licensed to be market makers in the CDX indices. The market makers include: ABN AMRO, Bank of America, Barclays Capital, Bear Stearns, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, UBS, and Wachovia.
About Fitch Ratings
Fitch Ratings is a leading global rating agency committed to providing the world's credit markets with accurate, timely and prospective credit opinions. Built on a foundation of organic growth and strategic acquisitions, Fitch Ratings has grown rapidly during the past decade gaining market presence throughout the world and across all fixed-income markets.
Fitch Ratings is dual-headquartered in New York and London, operating offices and joint ventures in more than 50 locations and covering entities in more than 80 countries. Fitch Ratings is a wholly owned subsidiary of Fimalac, S.A., an international business support services group headquartered in Paris, France.
About Markit
Markit Group Limited is the leading provider of independent data, portfolio valuations and OTC derivatives trade processing to the global financial and commodities markets. The company receives daily data contributions from over 75 dealing firms, and its services are used by almost 1,000 institutions to enhance trading operations, reduce risk and manage compliance.