Intercontinental Credit-Swap Futures Said to Shield Default Risk
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Credit swap index futures planned by Intercontinental Exchange Inc. are being designed to shield investors from the risk of underlying borrowers defaulting, according to two people with direct knowledge of the matter.
The contracts, which may begin trading in April, will reference upcoming Markit Group Ltd. indexes that contain only companies that are current on their debt payments, said the people, who asked not to be named because details aren’t public. Investors in existing swap indexes are affected if members default because the composition of the basket changes.