RepoClear clears first variable rate repo indexed on 鈧琒TR
09 December 2019 London
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RepoClear has cleared its first Variable Rate Repo (VRR) trade indexed on the Euro Short-Term Rate (鈧琒TR), with Credit Suisse among the first participants to clear the new rate at the clearinghouse, LCH. 鈧琒TR, launched on 2 October, is the euro risk-free rate that is set to replace the Euro OverNight Index Average (EONIA), which was previously the preferred overnight rate of all overnight unsecured lending transactions. Dipen Mistry, a director in the global liquidity group at Credit Suisse, added: 鈥淭he ability to clear repo trades index to 鈧琒TR is another important step in the market鈥檚 transition to new reference rates. We鈥檙e proud to be one of the first participants to centrally clear these trades, underlining our proactive engagement in the EUR market.鈥� In October, LCH cleared its first euro interest rate swaps referencing the 鈧琒TR, making it one of the first clearing houses to offer the swaps benchmarked to the new reference rate. More recently, in November, the European Central Bank working group on euro risk-free rates published a report on recommended fallback arrangements for the new 鈧琒TR. The plans should include the nomination of one or more alternative benchmarks that could be referenced to substitute the benchmarks no longer provided.
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