18 August 2016
Reporter: Mark Dugdale

ICE Clear Credit surpasses CDS milestone

Intercontinental Exchange’s ICE Clear Credit has surpassed $100 billion in gross notional cleared for client accounts for single name credit default swaps (CDS).

More than $100 billion notional in single name CDS has been cleared at ICE Clear Credit so far this year, compared with $33.3 billion for 2015, an increase of 200 percent.

ICE Clear Credit launched client clearing for single name CDS in June 2013.

Since launch, the number of clients actively clearing these instruments has grown consistently and is now over 100, with 90 percent of client volume occurring since the start of 2015.

“This is an important milestone for both ICE Clear Credit and the market as a whole," said Peter Borstelmann, head of corporate development at ICE Clear Credit.

“We have achieved this growth by working with customers to ensure we have the right products and clearing processes in place to create liquidity, transparency and restore trust in the single name CDS market.”

The growth in client clearing at ICE Clear Credit has occurred in the absence of a regulatory single name CDS clearing mandate for clients, according to ICE, which claims to have reduced counterparty risk exposure by clearing $80 trillion in gross notional for CDS instruments across its clearinghouses, with resulting open interest of approximately $1.4 trillion.

Ritesh Shah, COO for global credit at Citadel, an ICE Clear Credit client, added: “Citadel strongly supports the shift to central clearing of single name CDS, which will strengthen the market by increasing participation, fostering liquidity, and addressing counterparty credit risk concerns.”

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