TriOptima Completes First Inflation Swap Compression Cycle For EU Banks

The elimination of these swaps is important for firms as it mitigates capital costs, whilst bolstering the leverage ratio of

TriOptima, a post trade infrastructure provider, has announced the participation of eighteen banks in its inaugural triReduce inflation swap compression cycle, which effectively eliminated $98.5 billion in inflation index swaps for the EU, according to a TriOptima statement.

Inflation swaps are key goals of participating firms, encompassing long-term compounding coupons that help generate large cash payments – the elimination of these swaps is important for firms as it helps mitigate capital costs, whilst bolstering the leverage ratio of a company.

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TriOptima has already unveiled plans to execute similar inflation swap compression cycles with the GBP and USD, with additional consideration to run euro cycles for select European indices. The elimination of long-dated inflation swap compression is also enticing for TriOptima’s clients as it helps affiliates better meet their obligations under the European Solvency II regulatory regime.

According to Peter Weibel, Chief Executive Officer (CEO) of triReduce, in a recent statement on the cycles: “triReduce is always looking to enhance the services we offer to our customers, who continue to look for ways to reduce their balance sheet outstanding notional assets, and their capital costs.”

“The addition of inflation swap compression demonstrates TriOptima’s ongoing innovation and creativity in tackling these more difficult transaction types, which include cross currency swaps and FX forwards, and in delivering an efficient and effective solution,” he added.

Back in October, TriOptima made headlines when it jointly launched the triReduce Forward FX Compression Service with CLS Group. The triReduce CLS Forward FX Compression Service was designed to help consolidate CLS’s robust foreign exchange (FX) infrastructure as well as its market connectivity capabilities with TriOptima’s triReduce compression product.

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