CBOT Second Vice Chairman Michael P. Ryan, CBOT Director Harold W. Lavender, and CBOT Director James P. McMillin, were joined by Mehmood S. Nathani, Vice President and Assistant Treasurer for Fannie Mae, Jack Scott, Director for Hedging and Short Term Funding for Fannie Mae, and Louise Hurrle, Managing Director Funding and Hedging for Freddie Mac in ringing the opening bell in Chicago.
CBOT Chairman David P. Brennan said, "Investors and risk managers around the world are turning to alternative fixed-income derivatives for their risk management needs. Agency contracts at the CBOT are ideal because the action in benchmark interest rate markets is already here. The unmatched expertise of our members, the integrity of our markets, and the synergies that exist between the Treasury and agency markets make the CBOT the best trading venue for these products."
CBOT President and CEO Thomas R. Donovan said, "Today's launch of agency debt contracts is the result of an exceptional team effort among the members and staff of the Chicago Board of Trade, together with our partners at Freddie Mac and Fannie Mae. With the agency debt market growing rapidly, the CBOT is responding to customer demand. Our continuing efforts and global leadership will provide CBOT customers with a liquid market that can grow over the long-term. These new risk management tools will complement the CBOT's existing Treasury complex."
Freddie Mac Chairman and CEO Leland C. Brendsel noted, "The time for futures and options trading in GSE debt securities has arrived. The quality and liquidity of Freddie Mac's debt issues provide a solid foundation for successful futures and options contracts. We are pleased that the Chicago Board of Trade is in high gear in support of this market."
"Fannie Mae is pleased to be a vital part of this exciting new development in futures trading," said Timothy Howard, Fannie Mae's Executive Vice President and Chief Financial Officer. "The new CBOT agency futures product will provide investors and risk managers with a new way to benefit from the strong liquidity of Fannie Mae Benchmark Notes."
The new 10-year Agency Note futures contracts will trade in the 5-Year Treasury Note futures pit, and the new option contracts will trade in the 10-year Treasury Note options pit. Agency futures and options also will trade on the CBOT's electronic trading platform, Project A‚, beginning Sunday, March 19.
The CBOT 10-Year Agency Note futures contracts, starting with the June and September 2000 expirations, will trade as follows (Chicago time): 7:20 a.m. to 2:00 p.m. (Mon-Fri) Open Outcry; 5:30 a.m. to 2:00 p.m. (Mon-Fri) Project A Day Session (begins March 20); 2:15 p.m. to 4:30 p.m. (Mon-Thurs) Project A Afternoon Session (begins March 20); 6:00 p.m. to 5:00 a.m. (Sun-Thurs) Project A Overnight Session (begins March 19).
The CBOT 10-Year Agency Note option contracts, beginning with the May, June, and September 2000 expirations, will trade as follows (Chicago time): 7:20 a.m. to 2:00 p.m. (Mon-Fri) Open Outcry; 2:15 p.m. to 4:30 p.m. (Mon-Thurs) Project A Afternoon Session (begins March 20); 6:00 p.m. to 5:00 a.m. (Sun-Thurs) Project A Overnight Session (begins March 19).
Fannie Mae is a New York Stock Exchange company and the largest non-bank financial services company in the world. It operates pursuant to a federal charter and is the nation's largest source of financing for home mortgages.
Freddie Mac is a stockholder-owned corporation chartered by Congress in 1970 to create a continuous flow of funds to mortgage lenders. By supplying lenders with the money to make mortgages and packaging the mortgages into marketable securities, Freddie Mac sustains a stable mortgage credit system and reduces the mortgage rates paid by homebuyers.
