Finance: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
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
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
References
- ↑ 1.0 1.1 1.2 1.3 Lenzner, Robert (8 August 2007). "Profiting From The Meltdown". Forbes. https://www.forbes.com/2007/08/06/croesus-chronicles-indexes-oped-cz_rl_0807croesus.html. ""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" (in en). https://www.my-quickloan.co.uk/credit-history-when-applying-for-a-fast-loan/.
- ↑ Casey, Jerome (2023-03-15). "Improving Credit Score With a Credit Builder Loan" (in en-US). https://oxfordwisefinance.com/blog/improve-your-credit-score-with-a-credit-builder-loan/.
- ↑ Stein, Gabrielle (15 October 2007). "Tranched LCDX Hits the Market". http://www.highbeam.com/doc/1G1-169820376.html.
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