London and New York - Markit Group Limited ("Markit"), the leading industry source of independent mark-to-market pricing, valuations, dividend forecasting and index services, and Creditex Inc. ("Creditex"), the global market leader in e-trading of credit derivatives, are pleased to announce they have won the International Financing Review ("IFR") Innovation of the Year Award for developing the Credit Event Fixings.
The Credit Event Fixings are an initiative run by Creditex and Markit, in close cooperation with major credit derivatives dealers. The Fixings are designed to ensure a fair, efficient and transparent process for settlement of credit derivative trades following a corporate default.
During a Credit Event Fixing, dealers place executable orders on the Creditex platform for obligations of a particular company that has undergone a credit event, such as filing for bankruptcy. A market standard methodology is used to simultaneously execute these orders and generate a final cash settlement price for eligible credit derivative contracts referencing this entity. Markit verifies the integrity of the process and calculates the final price which it publishes to a freely accessible web page.
This year alone, Credit Event Fixings were held for Collins & Aikman, Delta Air Lines, Northwest Airlines and Delphi. The Credit Event Fixings are an important milestone in the rapidly growing credit derivative market, and pave the way for a more efficient settlement process.
Lance Uggla, CEO of Markit, said: "We are truly delighted to have been awarded IFR's Innovation of the Year. This award recognises the crucial role the Credit Event Fixings have played in helping the credit derivatives market weather the large corporate defaults we've seen in North America this year. The rapid adoption and acceptance of the Fixings is testament to both the growing maturity of the market and the underlying need to aid cash settlement."
Sunil Hirani, CEO of Creditex, said: "The Credit Event Fixings are the result of an unprecedented cooperative effort with the credit derivatives dealer community. We are very pleased to have worked closely with the major banks on this important initiative and we are delighted that it has been recognized as IFR's Innovation of the Year. Credit Event Fixings will continue to play a crucial role in the credit derivatives market going forward."