Cboe Global Markets is teaming up with BlackRock, the world’s largest asset manager, and IHS Markit Ltd., a global data and analytics firm, to develop the first broad-based U.S. corporate bond index futures.
The new products will be based on the same IHS Markit iBoxx indexes that underpin BlackRock’s high-yield (HYG) and investment-grade (LQD) indexes. They will be listed and trade on the Cboe futures exchange pending regulatory review by the Commodity Futures Trading Commission, and they are expected to launch this summer, starting with the high-yield index futures product.
The corporate bond index futures will function as a “tool to mitigate credit risk in the corporate bond market,” said Chris Concannon, Cboe president and chief operating officer, in a statement.
Martin Small, head of U.S. iShares at BlackRock, said in the same statement that the products will represent “a quantum leap forward towards better bond markets … that can help improve “price transparency and liquidity of corporate bond markets.”