Loan credit default swap index
The loan credit default swap index (LCDX) is a loan-only credit default swap index created by CDS Index Company (CDSIndexCo).[1] The LCDX index is a tradeable index with 100 equally weighted underlying single-name loan-only credit default swaps (LCDS).[2]
History[edit]
16 major financial institutions, JPMorgan, Goldman Sachs, Deutsche Bank, Barclays Capital, Bank of America, BNP Paribas, Citigroup, Credit Suisse, Lehman Brothers, Merrill Lynch, RBS Greenwich, UBS and Wachovia,[1] owned the private company called the CDS Index Company (CDS IndexCo), that developed the ABX index on 17 January 2006.[3]
Markit Group Limited marketed the ABX index and by 2007 had acquired (CDS IndexCo). On 17 The ABX index was a credit default swap of asset-backed mortgages of 30 of the most liquid mortgage-backed bonds. Hedge funds began shorting that ABX index in early 2006 at par. The Deutsche Bank, alone, reportedly made $250 million.(Lenzner 2007)[1]
Recognition[edit]
Forbes journalist described the creation of the index as just-in-time financial engineering. The LCDX provided protection for banks and hedge fund clients from the overly leveraged loan market.(Lenzner 2007)[1]
Stephen Waugh, a vice president at Deutsche Bank, announced the launch of Markit's first tranched "long-awaited" and "highly anticipated" loan credit default swap index (LCDX). Citigroup claimed it had been quoted on the market since the summer of 2007.(Stein 2007)[4]
See also[edit]
References[edit]
- ^ a b c d Lenzner, Robert (8 August 2007). "Profiting From The Meltdown". Forbes.
Some top banks are quietly indexing credit, avoiding the credit bubble and raking in big bucks.
- ^ "Assessing the Role of Credit History When Applying for a Fast Loan". Retrieved 2023-08-07.
- ^ Casey, Jerome (2023-03-15). "Improving Credit Score With a Credit Builder Loan". Oxford Wise Finance. Retrieved 2023-03-15.
- ^ Stein, Gabrielle (15 October 2007). "Tranched LCDX Hits the Market". Asset Securitization Report. Archived from the original on 24 September 2015.
External links[edit]
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