LCH.Clearnet has expanded its credit default swap clearing (CDS) service, CDSClear, to offer single-name CDS clearing.
The expansion provides the broadest European CDS portfolio coverage of any clearing house globally.
European members and clients can benefit from significant capital efficiencies through risk offsets between 187 single- names and existing index products through Monte Carlo Simulation VaR based portfolio margining.
Gavin Wells, chief executive of CDSClear, says: “With the addition of these 187 index constituents we believe the market will benefit from significant efficiencies. As regulations and clearing commitments evolve, we will continue to work collaboratively with market participants to ensure they can clear with confidence.”
Simon Morris, managing director, head of credit trading EMEA and Asia, Goldman Sachs, says: “We are pleased to see LCH.Clearnet introduce clearing across the broadest range of cleared European single-name CDS. We welcome the increased margin efficiencies generated through portfolio margining offsets of these 187 eligible single-names with the indices already cleared alongside the 86 additional single names now introduced to clearing.”
The launch of single-name clearing follows a series of achievements for CDSClear throughout the year. In July 2013 the service extended its reach to include European clients and US clearing members following regulatory approval.