News Release

CBOT to Launch Credit Default Swap Index Contracts

Thu May 31 2007

For Immediate Release

CBOT TO LAUNCH CREDIT DEFAULT SWAP INDEX FUTURES CONTRACTS
New Contract to Offer Transparency While Replicating Traditional OTC Trading Conventions

CHICAGO, IL, May 31, 2007 – The Chicago Board of Trade (CBOT®) today announced plans to launch electronically-traded credit default swap Index futures contracts.  The new CBOT CDR Liquid 50TM North American Investment Grade (NAIG) Index futures contracts are scheduled to begin trading on June 25, 2007.

Credit default swaps (CDS) are over-the-counter derivative contracts used to transfer or obtain credit exposure between market participants.  The contracts allow buyers to hedge against potential credit losses, while CDS sellers assume credit risk in exchange for payment.  Typical CDS market participants include banks, hedge funds and other institutional investors.

CBOT Senior Vice President of Business Development Robert D. Ray said, “CDS market participants will gain all the benefits of an exchange-traded contract which features complete price transparency, reduction of counterparty risk, actionable pricing and a transparent, rules-based index methodology.  The CBOT CDR Liquid 50 NAIG Index futures contract best replicates traditional OTC credit default swap trading conventions.”

The CBOT CDR Liquid 50 NAIG Index futures contract will be based on the CDR Liquid 50 NAIG Index, developed and maintained by Credit Derivatives Research, LLC (CDR).  The CDR Liquid 50 NAIG, which includes 50 North American investment grade reference entities, offers a transparent, unbiased selection process based upon a defined set of rules, including minimum levels of liquidity.  For this reason, the index is reconstituted every three months to ensure it includes the most liquid entities from the OTC market.

CDR Manager of Credit Indices Dave Klein said, “For the past three years, CDR has published market-driven credit indices designed to track the most liquid names in the global credit market.  The CBOT CDR Liquid 50 NAIG Index futures contract, based on our transparent credit index, enables credit derivatives trading for all market participants.”

Credit Market Analysis (CMA) will provide pricing information for all the underlying component issues within the CDR Liquid 50 NAIG index.  The CMA pricing data will be used to calculate the index value on the quarterly expiry date of the CBOT CDR Liquid 50 NAIG Index futures contracts.  CMA’s DataVisionTM service offers high-quality pricing data sourced from the front offices of buy-side firms including leading hedge funds, asset managers and global investment banks.

CMA Chief Executive Officer Laurent Paulhac said, “We are very pleased that CMA has been chosen as the pricing data provider by CDR for this exciting new project.  The CBOT’s new contract is a key innovation in the CDS market, and it is essential that it uses accurate and comprehensive data.  This partnership serves as further recognition that CMA DataVision is becoming an important industry standard for CDS data.”

The CBOT CDR Liquid 50 NAIG Index futures contracts will be traded on the CBOT electronic trading platform from 6:00 p.m. – 4:00 p.m. CT (the following day) under the ticker symbol CX.  Beginning June 1, 2007, daily cash value of the Liquid 50 NAIG index will be published on www.cbot.com/cds.  Following the launch of the product, the daily cash value will also be carried under the symbol CXX over the CBOT quote vendor network.  The CBOT intends to create a market maker program to help ensure that a two-sided market will be readily available for electronic trading.  Interested parties should contact the CBOT at (312) 341-7955.  For further information on the CBOT Financial complex, please visit www.cbot.com.

About the CBOT

As one of the leading global derivative exchanges, the Chicago Board of Trade provides a diverse mix of financial, equity and commodity futures and options-on-futures products.  Building on its 159-year history, the CBOT continues to advance into the future using the strength of deep liquidity, market integrity and member-trader expertise.  Using superior trading technology in both electronic and open-auction trading platforms, the CBOT provides premier customer service to risk managers and investors worldwide.  For more information, visit our website at www.cbot.com.

About Credit Derivatives Research

As a leading independent credit research firm, Credit Derivatives Research provides trading ideas and research for active and new participants in the credit derivatives market.  For the past three years, CDR has published indices that track the most liquid names of the global credit markets, including the CDR Liquid 50 NAIG and other CDR Liquid indices.  Founded in 2003, CDR has offices in New York City and Walnut Creek, California.  The company’s website is www.creditresearch.com.  CDR Liquid 50 and CDR Liquid 50 NAIG Index are trademarks of CDR.

About CMA

CMA pioneers ways to increase the efficiency of OTC credit market professionals. CMA’s real-time pricing services (CMA QuoteVision™) and data (CMA DataVision™) are used by investment professionals in over 130 leading Investment Banks, Hedge Funds and Asset Managers worldwide to improve trading performance and provide valuable information not only for the front-office but also risk, finance and research groups. CMA DataVision is available to more than 250,000 users around the world via the Bloomberg Professional® service. Founded in 2001 by credit specialists, CMA (www.cmavision.com) has offices in London and New York.  QuoteVision and DataVision are trademarks of CMA.

Forward Looking Statements

Certain statements in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and includes any use of the words “may,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue”.  These statements are based on management’s current expectations and involve assumptions that may be subject to change or risks and uncertainties that could cause actual results to differ materially from those set forth in the statements.  Accordingly, actual outcomes and results may differ materially from what is expressed or implied in any forward-looking statement contained in this press release.  The factors that may affect our performance may be found in the Annual Report on Form 10-K and other periodic reports filed by CBOT Holdings, Inc. with the U.S. Securities and Exchange Commission (“SEC”).  These filings can be obtained at the SEC’s website at www.sec.gov.  We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

CBOT Media Contact:
Craig Grabiner
(312) 341-5758
news@cbot.com

CBOT Investor Contact:
Deborah Koopman
(312) 789-8532
investorrelations@cbot.com

 

 

 

CDR Media Contact:
Susan Assadi
(800) 922-8792
sassadi@creditresearch.com

 

CDR Media Contact:
Angela Jamison
(800) 922-8792
ajamison@creditresearch.com

CMA Media Contact:
Lillian Shapiro
(44) 20-7925-8400
lillian.shapiro@cmavision.com

 

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