Q-Wixx, an electronic platform for trading large credit derivative portfolios, announced its inaugural beta trade - a portfolio of USD $1bn and €500mm consisting of 131 North American and European credit derivatives names.
This milestone transaction took ten minutes to execute on the Q-Wixx platform; in the past such a transaction would have required significantly more time. The shortened timeframe resulted in greatly reduced market risk to the participants.
Q-Wixx is expected to be in beta mode until January 2007 at which time a formal global launch is planned. In an industry experiencing exponential growth and considerable regulatory focus, the platform represents much needed certainty of execution, automation, operational benefits, as well as time and costs savings.
The inaugural beta trade on the Q-Wixx platform was done in conjunction with four major global credit derivatives dealers: Goldman Sachs, JPMorgan, Deutsche Bank and Credit Suisse, along with Cairn Capital, one of the leading credit hedge funds.
Q-Wixx was incubated and developed by Creditex Group, the leading electronic and hybrid marketplace for credit derivatives in the dealer community, and is being spun-off into a separate, independently managed entity.
Q-Wixx was specifically set up to assist hedge funds, correlation desks of dealers and buy-side market participants in achieving execution and processing efficiencies when executing transactions known as Offers Wanted in Competition ("OWICs") or Bids Wanted in Competition ("BWICs"). These transactions are lists regularly containing over 100 credit derivative names and notional amounts of more than USD $1bn or €1bn per list. Q-WIXX will provide processing efficiencies by the provision of Straight Through Processing through T-Zero.
Duncan Needham of Cairn Capital said; "Q-Wixx allows us to enhance returns for our investors while reducing operational risks. It is nothing short of an iPod for the credit markets. We have seen the future and it works."
"We are pleased to have participated in the first Q-Wixx auction and to have been part of this major milestone for the credit derivatives market," said Simon Morris of Goldman Sachs. "We will continue toto work collaboratively with Q-Wixx to develop and enhance this platform to ensure it meets the needs of global hedge funds, correlation desks and buy-side accounts."
Guy America, Head of Credit trading at JPMorgan, said, "Q-Wixx provides our clients with a very efficient platform that provides the assurance of execution and the necessary transparency."
"Q-Wixx provides our clients with the ability to execute OWICs and BWICs on an electronic platform in a fair and efficient manner" said Derek Smith of Deutsche Bank. "This is a necessary step in the right direction given the explosive growth of the credit derivatives market and the significantly increased level of activity in OWICs and BWICs lists."
Antoine Cornut, Head of European Flow Trading at Credit Suisse, said: "Q-Wixx is a significant step forward in the execution of OWICS and BWICS trades. We are delighted to have been a part of the first-ever Q-Wixx transaction."
Q-Wixx provides an innovative and efficient electronic platform for hedge funds, correlation desks and buy-side accounts to achieve a desired target level with the assurance of execution when transacting OWICS and BWICS in the fast growing credit derivatives market. The CDS market has grown 52% and is expected to top $26 trillion notional in 2006 according to ISDA.