Seven leading investment banks and Deutsche Borse are to form a joint venture company to provide real-time bond indices for euro and sterling denominated bonds.
The first index - for euro-denominated investment grade bonds, government through corporate bonds - will be launched before the end of the year, followed in early 2001 by a sterling index.
The new company will be owned by a consortium including Deutsche Borse and seven global investment banks: ABN Aamro, Barclays Capital, BNP Paribas, Deutsche Bank, Dresdner Bank, Morgan Stanley Dean Witter and UBS Warburg.
The company will offer real time indices, based on prices generated from the trading desks of the partner banks. Deutsche Borse will consolidate the prices, calculate the indices and distribute the data via real time feeds.
Christoph Lammersdorf, executive board member of Deutsche Borse, comments: "By providing investors with indices based on live prices, we will be offering investors greater market transparency and a solid, accurate basis for the establishment of performance benchmarks. The indices will also facilitate the creation of fixed income index-related derivative products, thereby enhancing the liquidity and depth of European capital markets."
The indices will be provided by the joint venture company based in London. The company will be 20% owned by Deutsche Börse with the remaining 80% equally divided among the partner banks.