Reuters adds US municipal bond data; selected to calculate Eonia swap index

Source: Reuters

Reuters (NASDAQ:RTRSY; LSE:RTR), the global information company, will offer its fixed income customers enhanced US municipal bond data through an agreement with Mergent Inc, a leading provider of global corporate and financial information and a part of Xinhua Finance Group (TSE Mothers:9399).

This announcement signals another step forward for Reuters wider fixed income market ambitions, and supports its US plans specifically.

Under the agreement, Reuters Station, Reuters Trader and Reuters 3000Xtra end users within the institutional sales & trading or asset management financial services segments will have access to Mergent's BondSource Municipal Bond Securities Data. BondSource is a complete database of over 1,400,000 security descriptions from more than 70,000 distinct issuers of US state and local tax-exempt debt including key material events.

This US bond data enhancement follows an extensive Q/A program completed by Reuters, Mergent and Morgan Stanley, the US-based investment bank. With the addition of Mergent's Municipal Bond Securities Data, Reuters customers will have access to a broad set of municipal information featuring Reuters editorial expertise in the US tax-exempt market with reporters covering the latest bond sales, political events and general news affecting the municipal markets. Reuters news is supplemented by i-Deal's municipal syndicate wire of competitive, negotiated and note pre-sales, sales and calendars. Pre-trade price discovery and compliance workflows access the real-time trade reporting from MSRB's secondary market price transparency data and Municipal Market Advisor's Consensus, the most consistent benchmark for daily municipal yield change.

Glenn Wright, Reuters Business Manager for Fixed Income in the Americas, said: "Mergent's professionalism and focus on quality has convinced us that we now can offer our clients a cost effective and timely source of comprehensive US tax-exempt reference data to institutional and retail professionals in this market."

Jonathan Worrall, Mergent's CEO, said: "Mergent is delighted to have worked closely with Reuters to bring this new innovative solution for fixed income data to their customers based upon more than a hundred years of data collection and analysis. The market has been demanding a new approach to meet this data requirement which Reuters will more than satisfy with this product launch."

Mergent's BondSource data is targeted to be available on selected Reuters desktops this summer. Customers can request a 30-day free trial through their account managers.

Separately, Reuters (LSE: RTR; NASDAQ: RTRSY) today announced it will be the official exclusive collector, calculator and distributor of the European Banking Federation's (FBE) Eonia Swap Index.

Reuters recently acquired Telerate business was selected because of its outstanding experience in processing and publishing global fixings, including EURIBOR, EONIA, EUREPO, LIBOR and EuroLIBOR, SONIA, TIBOR and PRIBOR.

The Eonia Swap Index is a new derivative market reference rate for the euro sponsored by the FBE and Euribor–ACI with the support of the recently acquired Telerate business. This new index will promote the development of new markets and products, providing a reference rate for long term swaps, creating a forward rate agreement market on Overnight Index Swaps and adding volume to the basis swap market. Reuters will initially collate data from a panel of 25 international banks across a range of maturities from one week to 12 months using specialist, proprietary contribution software.

"The Eonia Swap Index will be an extremely useful tool for the financial community allowing the development of new markets and products and will provide much needed reference prices for benchmarking purposes," said Achim Kraemer, Director of Global Markets Finance, Deutsche Bank.

"The EONIA SWAP INDEX will benefit from an increasingly homogenous and integrated swap market in the euro area, an impressive panel of quoting banks, a solid code of conduct setting out strict rules for the panel banks and an independent steering committee of market experts which oversees the application of the Code of Conduct and monitors market developments," said Guido Ravoet, FBE Chairman.

"The European Banking Federation chose Telerate to distribute The Eonia Swap Index because of its proven track record in publishing timely, accurate and reliable fixings. The Eonia Swap Index will happen as a result of the successful partnership between the FBE, Euribor-ACI and Telerate," he added.

An 'Eonia swap' is an interest rate swap transaction, where one party agrees to receive/pay a fixed rate to another party, against paying/receiving a floating rate called an Eonia. The Eonia Swap Index is the average rate at which at 16:30 CET a representative panel of prime banks provide daily quotes, rounded to three decimal places, that each panel bank believes is the mid market rate of Eonia swap quotations between prime banks. It is quoted on an actual/360 day basis. The number of panel banks used is, both, high enough to reflect faithfully the diversity of the Eonia swap market in the euro-zone and worldwide and low enough to ensure an efficient and manageable panel consisting of prime banks.

The Eonia Swap Index will be set and distributed by Reuters at 16.30 CET on each business day, providing risk managers with a solid base for the daily evaluation of positions.

"Calculating fixings such as the Eonia Swap Index is a long-time strength of Telerate. Under the Reuters portfolio, the launch of this new index further enhances our combined position as an established global distribution platform for benchmark data," said Mark Robson, Global Head of Treasury and Fixed Income services, Reuters. "We're honoured to work with the FBE on this important calculation and look forward to providing the financial community with a superior quality benchmark fixing, delivered with the highest degree of accuracy and speed."

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