TriOptima adds inflation swaps to the compression menu
TriOptima, a post-trade infrastructure provider owned by ICAP, announced in January that it had terminated $98.5 billion in inflation swaps for 18 banks.
As inflation swaps tend to be long-dated and have compounding coupons that generate large final cash payments, their elimination reduces investors’ capital costs and enhances their leverage ratio, TriOptima executives said.
The compression exercise was limited to inflation swaps based on a specific index that tracks consumer prices in Europe. The company plans to extend the service to other types of inflation swaps, including swaps based on French, British and U.S. price indices.
