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Crossover to expand as HY market booms 

February 12, 2014
Christopher Whittall, Reuters

Markit will expand its iTraxx Crossover index - the benchmark for sub-investment grade credit default swaps - in March in an effort to keep up with the mushrooming market for European high-yield bonds.

European high-yield debt smashed new supply records in 2013 with issuance totalling EUR68.7bn, according to Societe Generale, more than 60% higher than the previous record of EUR42.9bn in 2010. Seventy-nine new firms came to market over the course of the year, accounting for almost 37% of total issuance, according to Barclays.

The Crossover index has not moved in lockstep with the underlying cash market, though, remaining unchanged at 50 names since September 2011. As a result, some analysts reckon the index is becoming less representative of the junk bond market and a less effective hedge as a result.

Read more: Reuters

 

 
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