CBOT Board Approves New Ten- And Five-Year Agency Debt Futures And Options Contracts

In response to overwhelming interest from exchange customers, the Board of Directors of the Chicago Board of Trade has approved four new contracts based on federal agency debt. The proposed ten- and five-year agency debt futures and options contracts are based on the Federal National Mortgage Association's (Fannie Mae) Benchmark notes, and the Federal Home Loan Mortgage Association's (Freddie Mac) Reference notes instruments. CBOT Chairman David P. Brennan said, "There is a great demand for agency debt futures. Many investors are turning to alternative fixed-income instruments that provide similar debt characteristics to Treasury notes and bonds. These new contracts at the Board of Trade are natural complements to our bellwether financial instruments." CBOT President and CEO Thomas R. Donovan said, "The agency debt market is rapidly growing, with issuance exceeding that of the Treasury market in recent years. The trading potential of agency debt contracts is strong. These contracts will provide our customers more choices as they continue to look to the CBOT for their risk management needs." CBOT Executive Vice President for Business Development Patrick J. Catania, who will be overseeing the implementation of the new complex said, "The listing of these new contracts represents the CBOT's continuing effort to ensure that our products meet the needs of our customers and those of the marketplace." The launch date for the complex is March 31, 2000. Contract specifications are forthcoming.