ICE Clear Credit Is First CDS Clearing House to Process More Than $1 Trillion USD Notional Amount in One Day

Rhea-AI Summary

Intercontinental Exchange (NYSE: ICE) announced that ICE Clear Credit processed a record of more than $1.1 trillion USD equivalent notional amount of credit default swap (CDS) instruments on September 20, marking the highest amount cleared in a single day by any CDS clearinghouse. This included a record $900 billion from client-related CDS transactions.

ICE Clear Credit, founded in 2009, has become the leading global clearing house for credit derivatives, offering clearing for over 650 Single Name and Index CDS instruments. It has cleared more than $350 trillion in two-sided notional amount, with current open interest exceeding $1.8 trillion. The company recently announced plans to launch a clearing service for U.S. Treasury securities and repurchasing agreements, which will operate as a separate entity from the CDS clearing service.

Positive

• Record $1.1 trillion USD equivalent notional amount of CDS instruments processed in a single day
• Record $900 billion from client-related CDS transactions cleared
• Leading global clearing house for credit derivatives
• Offers clearing for over 650 Single Name and Index CDS instruments
• Cleared more than $350 trillion in two-sided notional amount
• Current open interest exceeding $1.8 trillion
• Plans to launch clearing service for U.S. Treasury securities and repurchasing agreements

Negative

• None.

Insights

Financial Analyst

The record-breaking $1.1 trillion USD equivalent notional amount of CDS instruments cleared by ICE Clear Credit in a single day is a significant milestone for the company and the CDS market. This achievement, particularly the $900 billion from client-related transactions, demonstrates ICE Clear Credit's dominant position in the credit derivatives clearing space.

Key takeaways for investors:

• Market Leadership: ICE Clear Credit's ability to handle such high volumes reinforces its market-leading position in CDS clearing.
• Revenue Potential: Higher clearing volumes typically translate to increased clearing fees, potentially boosting ICE's revenue.
• Risk Management: The company's robust clearing capabilities help reduce counterparty risk in the CDS market, enhancing financial stability.
• Growth Prospects: The planned expansion into U.S. Treasury securities and repo clearing indicates further diversification and growth opportunities.

While this news is positive for ICE, investors should also consider the cyclical nature of trading volumes and potential regulatory changes in the derivatives market that could impact future performance.

Market Research Analyst

ICE Clear Credit's record-breaking clearing volume signifies several important market trends:

• Increased CDS Market Activity: The $1.1 trillion notional amount cleared suggests a surge in CDS trading, possibly due to heightened market volatility or credit risk concerns.
• Growing Demand for Central Clearing: The 81.8% share of client-related transactions ($900 billion out of $1.1 trillion) indicates strong institutional demand for centralized clearing services.
• Market Confidence: ICE Clear Credit's ability to handle such volumes demonstrates market participants' trust in its risk management capabilities.
• Competitive Advantage: This milestone reinforces ICE's competitive edge in the financial infrastructure space, potentially attracting more clients and market share.

The planned expansion into Treasury clearing further positions ICE to capitalize on the growing demand for centralized clearing across various asset classes. This diversification strategy could help mitigate risks associated with potential fluctuations in CDS market activity.

ATLANTA & NEW YORK--(BUSINESS WIRE)-- Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, today announced that ICE Clear Credit processed a record of more than $1.1 trillion USD equivalent notional amount of credit default swap (CDS) instruments on Friday, September 20 - the most ever cleared in a single day by any CDS clearinghouse. As part of that, a record daily notional amount of $900 billion from client-related CDS transactions was cleared.

“The crossing of the $1 trillion USD equivalent notional amount milestone during one clearing day is a great testimony of our ability to support the ever-evolving CDS marketplace,” said Stan Ivanov, President of ICE Clear Credit. “The client-related notional amount of more than $900 billion unequivocally demonstrates the depth of our cleared CDS instrument liquidity pool and the choice by clients to use our CDS services.”

ICE Clear Credit was founded during the financial crisis in 2009 to bring confidence and stability to the CDS market. Since then, it has become the leading global clearing house for credit derivatives, including Single Name and Index CDS instruments, and options on index CDS. ICE Clear Credit offers clearing for more than 650 Single Name and Index CDS instruments referencing corporate and sovereign debt, and has reduced counterparty risk exposure by clearing more than $350 trillion in two-sided notional amount, with open interest of over $1.8 trillion.

ICE Clear Credit also recently announced plans to launch a clearing service for all U.S. Treasury securities and repurchasing agreements. The Treasury clearing service will be established as a distinct offering from the current CDS clearing service, and will have a separate rulebook, membership, risk management framework, financial and liquidity resources, and risk committee.

For more information about ICE Clear Credit, please visit: https://www.theice.com/credit-derivatives/options.

About Intercontinental Exchange

Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks that connect people to opportunity. We provide financial technology and data services across major asset classes helping our customers access mission-critical workflow tools that increase transparency and efficiency. ICE’s futures, equity, and options exchanges – including the New York Stock Exchange – and clearing houses help people invest, raise capital and manage risk. We offer some of the world’s largest markets to trade and clear energy and environmental products. Our fixed income, data services and execution capabilities provide information, analytics and platforms that help our customers streamline processes and capitalize on opportunities. At ICE Mortgage Technology, we are transforming U.S. housing finance, from initial consumer engagement through loan production, closing, registration and the long-term servicing relationship. Together, ICE transforms, streamlines and automates industries to connect our customers to opportunity.

The indices referenced herein are administered by ICE Data Indices, LLC. Additional important information regarding the indices (including methodology, limitations, and disclaimers) is available at indices.ice.com. Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 – Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 8, 2024.

Category: Fixed Income and Data Services

SOURCE: Intercontinental Exchange

ICE-CORP

View source version on businesswire.com: https://www.businesswire.com/news/home/20240925775204/en/

ICE Media Contact:

Damon Leavell

damon.leavell@ice.com

(212) 323-8587

media@ice.com

ICE Investor Contact:

Katia Gonzalez

+1 678 981 3882

katia.gonzalez@ice.com

investors@ice.com

Source: Intercontinental Exchange

FAQ

What record did ICE Clear Credit achieve on September 20?

ICE Clear Credit processed a record of more than $1.1 trillion USD equivalent notional amount of credit default swap (CDS) instruments on September 20, the highest amount cleared in a single day by any CDS clearinghouse.

How much client-related CDS transactions did ICE Clear Credit process on the record-breaking day?

ICE Clear Credit processed a record daily notional amount of $900 billion from client-related CDS transactions on September 20.

When was ICE Clear Credit founded and why?

ICE Clear Credit was founded in 2009 during the financial crisis to bring confidence and stability to the CDS market.

How many Single Name and Index CDS instruments does ICE Clear Credit offer clearing for?

ICE Clear Credit offers clearing for more than 650 Single Name and Index CDS instruments referencing corporate and sovereign debt.

What new clearing service is ICE Clear Credit planning to launch?

ICE Clear Credit is planning to launch a clearing service for all U.S. Treasury securities and repurchasing agreements, which will be established as a distinct offering from the current CDS clearing service.