Index providers iBoxx, TRAC-X to merge

EUROPE - Indices providers iBoxx and North-American TRAC-X have signed a letter of intent to merge.

The merger involves iBoxx bond indices, the European and Asian credit derivative index products with the Dow Jones TRAC-X European and Asian credit derivatives products. Financial terms were not disclosed.

The new bond indices will be known as Dow Jones iBoxx, while the credit derivative indices become Dow Jones iTraxx. North American credit derivative indices are not included in the merger, iBoxx said in a statement.

“This combination of the two market leading index families will provide investors with a single set of indices for bond markets and credit default swaps with unparalleled liquidity and rules-based transparency,” iBoxx said.

The merger will be effected through the formation of a new entity, the International Index Co. The shareholders include ABN Amro, Barclays, BNP Paribas, Deutsche Boerse, Deutsche Bank, Dresdner Kleinwort Wasserstein, Morgan Stanley, J P Morgan and UBS.

The new indices, supported by Dow Jones Indexes’s global marketing and licensing power, would “provide a strong foundation for future growth in the bond and credit derivative index markets”.

The merger had been planned for months, an iBoxx official said.

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