LCH SwapAgent announced it has registered its first CIBOR/SOFR* cross-currency basis swap between two Nordic Banks. Nordea Bank Abp and Danske Bank A/S were the counterparties to the trade, brokered by ICAP.

As a service offering standardisation for the non-cleared derivatives market, the trade highlights LCH SwapAgent’s capability to facilitate a coordinated transition to risk free rates for non-cleared OTC derivatives.

LCH #SwapAgent announces it has registered its first CIBOR/SOFR cross-currency basis swap between two Nordic Banks. Nordea Bank Abp and Danske Bank A/S were the counterparties to the trade, brokered by ICAP. Learn more about SwapAgent here: https://t.co/chdcCNSV7v pic.twitter.com/h5E8KIfNjZ

— LCH (@LCH_Clearing) September 27, 2022

Nathan Ondyak, Global Head of LCH SwapAgent, said: “This milestone transaction further underlines LCH SwapAgent’s commitment to supporting reference rate reform and reducing trading frictions in the global cross currency basis swap markets.”

Morten Rasmussen, Head of Markets Trading, Nordea, said: “Participating in this landmark trade means we continue to develop liquidity in risk free benchmark rates. Through LCH SwapAgent, we look forward to bringing further operational and capital efficiencies to non- cleared derivatives markets in the Nordic region.”

Jeppe Østerby Thomsen, Global Head of STIR Trading, Danske, said: “We are pleased to be part of this important trade for the Nordic region and further contribute to the global transition to risk free rates. The standardisation benefits LCH SwapAgent brings to the bilateral market means we can further mitigate risk and enhance settlement capabilities.

Simon Payne, MD Xccy Swaps, ICAP, said: “ICAP is proud to have executed the first LCH SwapAgent CIBOR/SOFR cross-currency basis trade between two Nordic banks. LCH SwapAgent both enhances operational efficiencies and reduces trading frictions in the cross-currency basis market. This inaugural deal underlines that ICAP is well placed to support our clients in the global transition to risk free rates.”

LCH SwapAgent is a service designed to simplify the processing, margining and settlement of non-cleared derivatives. It provides these solutions by extending the clearing infrastructure to the bilateral market without requiring novation to a central counterparty.

The service has continued to grow its offering, with $6 trillion in notional registered since its launch in 2017. There are now 37 counterparties from nine countries live on LCH SwapAgent, including Nordea Bank Abp, and Danske Bank A/S.

* Copenhagen Interbank Offered Rate (CIBOR), Secured Overnight Financing Rate (SOFR) 

Source: LCH