International Derivatives Clearing Group, the clearing house for interest rate swaps backed by Nasdaq OMX, has obtained a $100m backstop credit facility to fulfil a regulatory requirement. Commerzbank and Bank of America led the syndication and each provided $25m of the loan, which was oversubscribed by banks.
“I hope I never, ever have to draw on this line – it’s a safety stop,” said Chris Edmonds, chief executive of IDCG in New York. “But it’s great to be able to secure it, considering how difficult the credit markets have been.”
Edmonds explained to Futures and Options Intelligence that if one of IDCG’s counterparties ever defaulted, the loan would give the clearing house a breathing space in which to find the most economic way to resolve its positions. IDCG is paying a 20bp up front fee, a 50bp annual commitment fee during the...