• LCH SwapClear is the first clearing house to offer clearing of Overnight Index Swaps using the DESTR risk free rate
• Extension of service demonstrates LCH’s commitment to supporting interest rate benchmark reform globally
• LCH SwapClear offers clearing for interest rate products across 27 global currencies

 LCH SwapClear announces the service has extended clearing eligibility to SWESTR (Swedish krona Short-Term Rate) Overnight Index Swaps (OIS) and is the first CCP to launch the clearing of DESTR (Denmark Short-Term Rate) OIS. SWESTR is Sveriges Riksbank’s recommended alternative to STIBOR and DESTR has been recommended by Danmarks Nationalbank as the preferred risk-free reference rate in Danish kroner.

#LCH #SwapClear has extended #clearing eligibility to #SWESTR Overnight Index Swaps (OIS) and is the first CCP to launch the clearing of #DESTR OIS. Read more here: https://t.co/UzrGneY2go pic.twitter.com/C57yc2iKb9

— LCH, An LSEG Business (@LCH_Clearing) December 14, 2022

Nordea and Danske were counterparties to the first trade cleared through LCH SwapClear referencing DESTR, while SEB and Swedbank were the counterparties to the first cleared trade referencing SWESTR.

The launch further demonstrates LCH’s commitment to supporting benchmark transition in the cleared and bilateral Nordic markets. In September 2022, LCH SwapAgent announced it had registered its first CIBOR/SOFR* cross-currency basis swap between two Nordic banks, Nordea and Danske.

 Susi de Verdelon, Head of SwapClear and Listed Rates, LCH Ltd, said: “We are pleased to extend our services to include clearing of SWESTR and be the first CCP to offer clearing for DESTR. LCH is committed to supporting the industry-wide transition to risk free rates and enabling our members and their clients to benefit from strong risk management and increased capital efficiencies.”

Morten Lau Bæk, Managing Director, Head of DKK, EUR Fixed Income & XCCY Trading, Nordea, said: We are delighted to participate in this first with LCH SwapClear. The clearing of DESTR swaps will be a key component in building a liquid market for this product and we look forward to further contributing to its development.”

Eske Traberg Smidt, Managing Director, Fixed Income, Danske, said: “This is a significant development for the Nordic market. Being part of this milestone DESTR trade with LCH SwapClear enables us to achieve further risk and settlement efficiencies in our derivatives portfolios and expand the services we offer our clients.”

Leif Lindahl, Co-Head of Fixed Income, SEB, said: “We are pleased to be one of the counterparties helping to build liquidity in SWESTR-based swaps and will benefit from clearing solutions such as LCH SwapClear that provide access to this liquidity.”

Hamish Darbyshire, Senior Derivatives Trader, Swedbank, said “We are excited to be one of the first Nordic firms who are deriving real benefits from using LCH SwapClear to clear their SWESTR OIS trades, as well as other interest rate swap products. This will allow us to expand and improve our customer offering.” 

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

Source: LCH