TriOptima's portfolio compression service, triReduce, eliminated $30.2 trillion in CDS notional principal during 2008.
TriOptima offered 50 compression cycles in 2008 contributing significantly to industry efforts to reduce the notional principal outstandings. Reductions in notional principal continued to accelerate throughout 2008, increasing 300% over 2007 levels as indicated in the graph attached.
"In cooperation with the dealing community, we were able to accommodate the demand for additional regular cycles and support the special default cycles that were required as market conditions deteriorated," commented Brian Meese, Group CEO. "It is important to note that the $30.2 trillion notional eliminated by the dealers this year exceeds the year end outstandings of $29.3 trillion reported by DTCC. By reducing exposures through regular compression cycles the dealers were able to continue providing effective risk mitigation tools while responding to regulatory concerns about counterparty exposure and operational challenges."
TriOptima's CDS compression cycles include American, European, Emerging Market, Asian and Japanese indices; ABX and CMBX indices; American and European tranches; US, European, Emerging Market, Japanese, and Asian single name CDS; and special cycles for single names and indices affected by credit events like Washington Mutual, Fannie Mae, Freddie Mac, Lehman and the Icelandic banks.