The new indices will cover the US investment grade market and will be the first US Dollar bond indices constructed in accordance with iBoxx's principles of selected multiple-contributor pricing, rigorous third party quality controls, neutrality and open access for all fixed income market participants. The new index family will complement iBoxx's existing European indices with sub-indices by issuer type (including Treasury, Agency, ABS/MBS and Corporate debt), maturity, rating and sector.
As an independent organization, iBoxx determines the rules for its indices. Leading investment banks submit bond prices to RiskMetrics Group, where they are subjected to a series of rigorous quality controls before being consolidated, published and used for index construction. The consolidated bond prices, the new indices and a range of analytical values will be made available to the market under the iBoxx brand in the first quarter of 2004.
Ethan Berman, RiskMetrics Group CEO, said: "We are delighted to be working together with iBoxx to create an exciting new transparent standard for the fixed income market." David Mark, CEO of iBoxx, said, "Our move to provide market participants with high quality, independent, accessible bond pricing and indices for the US market is the next step towards a series of global investment grade indices. Our experience in Europe demonstrates that the market is keen to adopt neutral, transparent pricing sources for indexation, valuation and risk measurement. In addition, iBoxx data supports a range of derivative and fund-based products in a rapidly growing market segment."
