London and Frankfurt - International Index Company Limited (IIC), the leading independent provider of credit derivative and fixed income indices, and Markit Group Limited ("Markit"), the leading industry source of independent pricing, reference data and valuations, today announced that they have signed an agreement governing the calculation and publication of IIC’s iTraxx indices, the benchmark for the European and Asian credit markets.
Under the terms of the agreement, IIC appoints Markit as exclusive calculation agent for the iTraxx indices. This entails the collection of source data from leading financial institutions, quality control, and the calculation and publication of the official iTraxx daily index closing values. Index levels are made freely available to the market via various media and on the Markit and iTraxx websites - www.markit.com and www.itraxx.com. These published levels are the authorised, official iTraxx index levels.
IIC manages and administers the iTraxx credit derivative and iBoxx bond indices. The iTraxx indices were launched in 2004 in conjunction with a consortium of leading global investment banks. The rules-based indices comprise the most liquid names in the European and Asian credit markets, and consist of iTraxx Europe, iTraxx HiVol, iTraxx Crossover, iTraxx Asia ex-Japan, iTraxx Japan, iTraxx Australia, iTraxx SDI-75, and various sub-indices.
Markit provides independent pricing, reference data and valuations for the global financial and commodities markets, and receives data contributions from over 60 dealing firms. The company provides a weekly Tradeable Credit Fixing for three of the most liquid iTraxx indices - the 5-year Europe, HiVol and Crossover indices - via an online auction held in conjunction with Creditex.
David Mark, CEO of IIC, said: “The burgeoning growth of the credit derivatives market and the expected proliferation of structured products based on the iTraxx indices mean it is essential that index users can rely on robustly calculated index levels. That is why we have chosen to work with Markit as calculation agent, further reinforcing iTraxx’s position as the benchmark credit derivatives indices.”
Kevin Gould, Executive Vice President and Head of Data Products and Analytics at Markit, commented: "We are very pleased to have been offered this new and important role in the iTraxx indices, and we look forward to helping the IIC continue to deliver accurate, benchmark data for the credit derivatives market. This agreement confirms Markit’s position as the key calculation agent across all synthetic indices and will aid operational efficiency right when the industry most needs it.”
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