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Where Are The New Entrants?

13 March 2015 by lberuti

When the current series of indices were launched on October 6th, 2014, the number of constituents of iTraxx Crossover was expanded from 60 previously to 75. That followed a similar increase in March 2014 from series 20 to series 21, when iTraxx Crossover saw its population rise from 50 to 60 members. Trading on the 10 names that made it a year ago has been a success and their inclusion in the index has definitely improved their liquidity. The likes of VUECIN (Vougeot), LOUDRE (Louis Dreyfus), ABGSM (Abengoa) or ALTICE trade on a regular basis and are now part of the CDS landscape. Hence, on the above grapple where each name is depicted by a square whose size depends on the notional traded over the last 6 months, you can spot all of them. It is quite a different story for most of the new entrants into series 22. You can look as long as you wish, you will struggle to find LOXAM, CARE UK, SELNSW (Selecta Group), LINDOR (Lock Lower) or NVFVES (Novafives). The reason is simple: they hardly trade. Nevertheless it has been decided to leave them in iTraxx Crossover series 23. So, they will be given another chance, but if trading does not start in earnest on these names, one could legitimately question their inclusion in any further series and reducing the number of iTraxx Crossover constituents should seriously be considered.