- DelphX Capital Markets Inc. (DELX) has launched a Credit Rating Security (CRS) product
- The CRS product will give bondholders and traders the ability to position against potential rating changes on existing bonds
- DelphX has filed a provisional patent to protect its intellectual property rights ahead of the initial launch
- DelphX CEO Patrick Wood sat down with Sabrina Cuthbert to discuss the new product
- DelphX is a technology and financial services company
- Delphx Capital Markets Inc. (DELX) opened trading at $0.115
DelphX Capital Markets Inc. (DELX) has launched a Credit Rating Security (CRS) product.
The CRS product will give bondholders and traders the ability to position against potential rating changes on existing bonds. This represents a very large market, as most institutional-quality bonds carry creditworthiness ratings ranging from AAA (strongest) to C or D (weakest) from rating agencies such as Moody’s, Standard & Poor’s, and Fitch. These ratings are not static but often fluctuate during the life of a bond, affecting the market value of the underlying asset.
DelphX has filed a provisional patent to protect its intellectual property rights ahead of the initial launch.
DelphX CEO Patrick Wood sat down with Sabrina Cuthbert to discuss the new product.
“We designed the CRS product in response to a significant unmet need presented to us by major portfolio holders. There is no other product like this in the market, so today’s announcement is also an open invitation for portfolio managers and traders to take a closer look at what the CRS can do to reduce risk and increase yield. The emphasis in the fixed-income market has traditionally been on default protection, ignoring the financial impact of a bond’s valuation timeline, which is typically marked by multiple downgrades on the journey to a default. Our CRS product gives portfolio managers the ability to pick spots along that duration timeline to add an extra layer of protection or speculation. It is important to remember that downgrades are far more common than defaults, as there are 21 different levels on the rating scales. So, the transaction volume for this product could be far larger than similar default-oriented products, a plus for trading desks. Perhaps most importantly, this is the kind of tool that can help a portfolio manager sleep better at night – by removing an element of uncertainty from the valuation equation.”
DelphX is a technology and financial services company focused on developing and distributing structured products. Through its special purpose vehicle Quantem LLC, the company enables fixed-income dealers to offer new private placement securities that optimally transfer and diffuse credit risk while allowing the enhancement of yield.
Delphx Capital Markets Inc. (DELX) opened trading at $0.115.