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Matif 30-year multi-issuer contract
A pan-European contract
Paris, September 1, 1998 -- On 28 September 1998, Matif SA
will launch Europe's first multi-issuer contract in the 30-year
segment of the euro yield curve under the name "E-Bond
future".
This pan-European contract breaks new ground, anticipating the needs
of investors seeking products based on liquid underlying securities
drawn from across the euro zone.
The delivery pool for the E-Bond contract is based on similar
securities issued by countries participating in Emu. Criteria for
selection include:
- credit ratings
The E-Bond contract will be underpinned by the best sovereign
signatures in the euro zone. The first delivery month opened - March
1999 - thus includes securities issued by France, Germany, and
the Netherlands.
- homogeneity
the delivery basket will include homogenous government
securities so that any change in the cheapest-to-deliver will entail
a slight price variation. This is due to the fact that the basket is
composed of similar securities with narrow spreads. In order to
preserve this advantage in the environment of lower interest rates,
the residual maturity range of securities will be fixed at 25-35
years.
- liquidity
As interest rates tend to head down, investors are drawn to
longer maturities offering higher yields; this, combined with a rise
in the volume of outstanding issues in the 30-year segment by
sovereign euro-zone issuers adds to the appeal of a liquid,
multi-issuer contract and thereby reduces the risk of a squeeze
that would destabilize the market. For inclusion in the pool,
issues must have a minimum of 5bn euro outstanding one month before
the contract delivery date. The total bond pool for March 1999
delivery is around 45bn euro.
A very competitive trading and clearing fee of FRF 1.70 will
apply to the E-Bond contract from the launch date. Like other Matif
futures, it will be traded from 8.00 a.m. to 10.00 p.m. (Paris
time) on NSC workstations. One-quarter of terminals now in service
are located outside France. This distribution network will be expanded
in the near future, when the Chicago Mercantile Exchange starts using
the NSC system under the name "Globex 2".
Appendices:
Contacts:
Antoinette Bouvier-Darpy, tel. +33 / 1 40 28 83 89
Nathalie Boschat, tel. + 44 / 171 332 59 20 |
