OTC Exchange executes over £1bn of swaps for UK Quasi-Sovereigns

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OTC Exchange, the OTC Derivatives Exchange platform established by TradeRisks has announced that is has transacted a total of more than £1bn notional of GBP swaps for UK quasi-sovereign social housing providers.

Prior to the establishment of OTC Exchange, this market was dominated by the traditional lenders to social housing providers, which were also frequently their sole swap counterparties. The combination of higher credit quality market entrants and a clear and transparent execution framework has seen the social housing providers executing swaps with OTC Exchange counterparties while making transaction cost savings of around 75%

Phil Jenkins, a spokesman for OTC Exchange said that “in the main, the traditional lending banks have responded in a reasonable commercial manner by reducing pricing in order to protect their market position.” However, he added that “some borrowers have also experienced a much more aggressive response from certain lenders which appear to have difficulty with the concept of fair and transparent competition for hedging products.”