CME Group is set to expand its interest rate complex with the launch of US corporate bond index futures in summer 2024, subject to regulatory review.
The new futures contracts will be based on the Bloomberg US corporate index and the Bloomberg US high yield very liquid index.
The two indexes measure the performance of investment grade corporate bonds and a liquid, diversified component of the high yield corporate bond market, respectively.
“As corporate debt issuance continues to increase across sectors, market participants are looking for tools to help them navigate growing credit exposure,” said Agha Mirza, global head of rates and OTC products at CME Group.
“Our new US corporate bond index futures will bring clients the speed and precision they need to manage risk and pursue opportunities in the market, while gaining capital efficiencies through portfolio margining.”
The new index futures will be available to trade on CME Globex and eligible for submission to clearing via CME ClearPort.
CME Group added that these contracts will receive automatic margin offsets against existing CME Group interest rate and equity index futures upon launch.
“Bloomberg Indices is proud to be at the forefront of advancing the evolution of credit markets and we’re excited to be working with CME Group to bring this new offering to market,” said Umesh Gajria, global head of index linked products at Bloomberg Index Services.
“The launch of listed futures on the Bloomberg US Corporate Bond Indices is intended to provide investors with the ability to more accurately and efficiently gain exposure to the corporate bond market and hedge their credit risk.”