London and New York - Markit Group Limited ("Markit"), the benchmark industry source of independent pricing and valuations, is pleased to announce it has won International Securitisation Report's 2005 "Editor's Award for Innovation". The winners of the ISR awards were announced last night at the ISR Annual Awards Dinner in London.
Markit won ISR's Award for Innovation in recognition of services provided to the structured credit market in 2005 which boosted transparency and liquidity across the sector. The services singled out were Markit's European ABS pricing service; the Tradeable Credit Fixings and Credit Event Fixings the firm launched with Creditex, the credit derivatives broker, in consultation with leading dealers; and the launch of ABX, the synthetic ABS index that Markit developed in conjunction with CDS IndexCo, a consortium of 16 investment banks.
Markit's European ABS pricing service was launched in November 2005 to address the lack of a daily, independent pricing source for secondary ABS markets required for daily mark-to-market calculations. In addition to bringing price discovery to the European ABS markets, the pricing service has streamlined the process for those seeking regular revaluation prices.
The Tradeable Credit Fixings were launched in March 2005 for the three most liquid iTraxx indices: the 5yr Europe, HiVol and Crossover indices via a weekly online auction on the Creditex platform. Dealers submit executable two-way prices which are verified by Markit. The Fixings have spurred the development of second generation credit derivative products which depend on a market-supported reference rate.
The Fixings process was subsequently adapted to produce Credit Event Fixings, auctions to determine cash settlement prices for credit derivative index trades following a corporate bankruptcy. Designed to prevent potential settlement problems, and ensure a transparent and fair price representative of the trading market level, the Credit Event Fixings have been used to settle trades referencing the defaulted U.S companies Collins & Aikman, Delta Air Lines, Northwest Airlines, Delphi and Calpine.
ABX, an asset-backed credit derivative index of U.S. sub-prime residential mortgages, was launched in January 2006 by Markit and CDS IndexCo. The index references 20 tranches of US sub-prime home equity loan securitisations chosen through a polling process of 15 contributing dealers. Other asset classes such as CMBS are expected to be rolled out this year.
Lance Uggla, CEO of Markit said: "We are delighted to have won ISR's "Editor's Award for Innovation" for the initiatives we brought to market in the course of 2005. This award recognises the efforts we've made to work closely with the dealing and broking community in order to provide consensus-driven industry solutions for the structured credit markets - solutions which should further spur market efficiency, liquidity and growth."