Wednesday, July 30, 2008

TriOptima announces that tear-ups total nearly $18 trillion this year

(CreditFlux) TriOptima announced that its portfolio compression service, triReduce, has so far terminated $17.8 trillion notional in credit default swaps this year. It says this represents more than 50% of the $32 trillion total interdealer CDS notional principal outstandings as reported by the BIS for year end 2007.

TriOptima's press release:
TriOptima announced today that since the inauguration of its credit default swap portfolio compression service triReduce in 2005, it has reduced the notional principal outstandings of credit default swaps by 32 trillion USD versus a total outstanding of 62 trillion USD. Through portfolio compression cycles, TriOptima has achieved elimination ratios of 95% in credit index portfolios and 72% of credit single-name portfolios.

TriOptima's CEO Brian Meese commented, "TriOptima introduced portfolio compression to the market in 2003, expanding into CDS and other products in 2005. Today the 25 most active dealers all use TriOptima’s portfolio compression services. We are pleased with the industry’s response to our initiative, and we support the efforts of the industry to expand the process. Of the 32 trillion USD TriOptima has eliminated, 16 trillion USD have been removed in the first six months of 2008 alone, showing a significant increase in focus by the industry on this process as a way of addressing regulators’ concerns. We believe that terminating over 50% of total outstanding is an excellent start, and we look forward to working closely with our clients and all participants in the market to achieve further success."

TriOptima will be running 20 regularly scheduled compression cycles in both single-name and index credit derivatives during the second half of 2008.

The Bank for International Settlements (BIS) recognized TriOptima's achievements in its December 2007 Triennial Report. TriOptima has also won several awards for its innovative service, including Risk Magazine 2006 Technology Platform of the Year, labeling triReduce a "godsend" for the credit derivatives market, and the Risk Magazine Industry Trade Processing Platform Award in 2007

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