New York - Bloomberg has announced the launch of standardized Total Return Swap contracts on the Bloomberg Barclays Indices, providing predefined synthetic exposure to cash bonds for the most widely-used fixed income benchmarks.
"The introduction of Bloomberg TRS will help drive down costs and risks for a broader set of market participants," said Bloomberg's Global Credit and TRS Business Manager Paul Kaplan. "As margin, risk and post-trade capital requirements have reduced the amount of risk and large bond positions that financial institutions can carry, our standardized total return swaps enable buy-side and sell-side clients to maintain effective trading strategies."
Additional features include:
- Unprecedented Transparency: Full constituent data and analytics are now available through the Bloomberg Terminal to all Bloomberg Anywhere subscribers. Price discovery will be enhanced with streaming levels from multiple market makers.
- "Fungible" Trading Solution: Investors are able to enter and exit trades with minimum negotiations.
- Minimized Tracking Error: Buying swaps as synthetic exposure to indices incurs a lower risk of divergence between the price behavior of a position and the price behavior of a benchmark.
- Flexibility: Standardized TRS and other OTC products provide alternative positions to holding cash.
- Scalability: A standardized model and interoperability with Bloomberg's other fixed income analytics supports the introduction of additional benchmarks.