Derivatives trading platform Creditex has acquired an undisclosed minority stake in Trade Settlement Incorporated (TSI), a privately-held provider of settlement services to the primary and secondary syndicated loan markets in the US.
Financial terms of the deal were not disclosed.
Creditex says the investment is a move to capitalise on the anticipated growth in loan-only credit default swaps (LCDS).
As part of the transaction, TSI will form a strategic partnership with T-Zero - Ceditex's post-trade straight-through processing platform for credit derivatives trades - in order to prepares for growth in LCDS.
The partnership will bring together T-Zero's affirmation platform with TSI's settlement services. Creditex says the two firms will work together to provide an integrated system for accurate trade capture, straight-through-processing (STP) and settlement of loan credit derivatives.
"Our clients have been looking for LCDS solutions that can combine derivatives best practice with knowledge of, and access to, the settlement of the underlying loans," says Mark Beeston, president of T-Zero. "With TSI, we are uniquely positioned to deliver a solution that handles our clients' increasing LCDS volumes from trade affirmation right through to loan settlement."
The Creditex investment also comes as TSI prepares to expand its post-trade platform for primary and secondary syndicated loans to the European market.