CME Group has acquired Credit Market Analysis Limited (CMA), a provider of credit derivatives market data, providing CME Group with greater exposure to the rapidly growing $46 trillion in notional outstanding credit derivatives market.
It offers the potential to leverage CME Groups clearing and trade execution capabilities, enhancing CMAs products to create greater value and efficiencies for its customers.
As a wholly owned subsidiary of CME Group, CMA will remain headquartered in London and will continue to operate under the CMA name. Laurent Paulhac will continue in his role as the companys CEO and the existing CMA management team is expected to remain in place.
CMA currently offers two products to over-the-counter (OTC) credit derivative market participants, primarily focused on asset managers, hedge funds and other buyside participants. The companys flagship CMA QuoteVision price discovery tool provides a clear structured view of live indicative quotes. QuoteVision capitalizes on the email-based quoting model prevalent in the credit default swap market and enables traders to view, organise and store quotes that they receive in real time, regardless of format.
The CMA DataVision end-of-day pricing service, another key product offering, provides objective buy-side consensus price verification data, enabling organisations to have a true market view and more accurately evaluate their end-of-day positions.
“When we think of diversification at CME Group, we look beyond asset class diversity and think more strategically in terms of products and services where we believe we can deliver innovation and create new value for the market. We are pleased to add CMAs data products to the services we provide and believe that we can help them enhance their offerings, creating a higher level of market efficiencies and transparency. We will continue to look for strategic opportunities through alliances, joint ventures and acquisitions, which can further our continued growth and our ability to deliver value to our customers and shareholders,” says Terry Duffy, executive chairman, CME Group.
“Today’s announcement of our acquisition of CMA reflects our ongoing commitment to expand our existing core businesses while seeking innovative and substantial new growth opportunities in today’s rapidly evolving markets. CME Groups OTC strategy has focused on identifying opportunities where we can leverage our strengths in technology and clearing services, which will create greater efficiencies and opportunities for market participants. Its impossible to overestimate the importance of accurate, timely and reliable sources of market data to the smooth functioning of financial markets, especially in todays environment. Working together, we believe that we can expand CMAs existing services in the credit derivatives markets, as well as to additional asset classes that would benefit from additional transparency or central counterparty clearing services,” says Craig Donohue, CEO, CME.
“CMA promotes transparency in the credit derivatives market with innovative products and services. With CME Groups support, we can further enhance the effectiveness of OTC credit market professionals. This move will take CMAs business to new levels, enabling us to expand our product line and explore opportunities within and beyond the credit derivatives market. Taking the longer view, we will leverage synergies between CMAs products and CME Groups market data and trading-related capabilities to provide greater market transparency and to better serve the industry,” adds Paulhac.
Under the agreement, CME Group, through its subsidiary CME Swaps Marketplace Ltd., will purchase 100% of the share capital of CMA, all of its operating assets and intellectual property. Further terms of the sale were not disclosed. Lehman Brothers is acting as financial advisor to CME Group, and Skadden, Arps, Slate, Meagher & Flom, LLP is acting as CME Groups legal advisor.
Jefferies & Company is acting as financial advisor to CMA, and Gibson, Dunn and Crutcher, LLP and Duncan Cotterill are acting as CMAs legal advisors.