DelphX Completes First CPO and CRN Issue; Introduces groundbreaking return and risk tools for the global bond market
TORONTO, June 9, 2022 /PRNewswire/ – DelphX Capital Markets Inc. (TSXV: DELX) (OTCQB: DPXCF) (“DelphiX“) is pleased to announce the first issuance of its own Collateralized Put Options (CPO) and Collateralized Reference Notes (CRN), marking the first institutional issuance of this new class of structured products. The inaugural transactions were completed in collaboration with custodian BNY Mellon, placement agent LPS Capital, and two institutional investor accounts. This successful process marks a major milestone for DelphX, finalizing a multi-year development effort and initiating the long-awaited commercialization phase.
Building on the success of these first operations, DelphX has now proven the process of issuing its CPOs and CRNs, validating the relevance of these solutions within the framework of the credit strategies of institutional investors. The company relied on extensive industry interaction and feedback during the lengthy development process, creating broad awareness within the fixed income community ahead of launch. This set of “go-live” transactions will now allow DelphX to continue the full rollout of its products through leading bond brokers who have followed the development of these industry first products. The Company also anticipates strong interest from financial entities that are unable or unwilling to use CDS or similar derivatives due to their investment mandates, but are able to use the DelphX CPO and CRN products. .
The timing of the launch coincides with a surge in trading volume of the closest competing financial vehicle, credit default swaps (CDS), which Tradeweb says has risen to US$811 billion in March 2022from 330 billion US dollars in February 2022. The recent growth of this market represents a major acceleration from 2021, when global dealer bank OTC CDS outstanding notionals increased by 5% to reach $8.8 trillion (as reported by the Bank for International Settlements). The DelphX product offerings represent a timely new set of risk-mitigating and yield-enhancing securities fundamentally improved over CDS and other existing structured products.
“I want to thank everyone who has helped us bring to market what we believe to be some of the most exciting new structured products in over a decade,” said DelphX CEO. patrick wood. “Credit default swaps have been in the news a lot lately, with global affairs forcing prominent segments of this market into disarray. So our moment to offer a better alternative to these necessary but historically flawed CDS financial instruments is Couldn’t be better.Another way to think of DelphX is like a kind of CDS 2.0, but with a vastly improved risk structure thanks to a comprehensive guarantee, a transparent and predefined default resolution process, and an improved yield backed by security. U.S. Treasury Bonds.
“The fixed income space is experiencing conditions not seen in decades, so we are entering the market at a time when managers have an increased need for tools to manage both risk and return. is an exciting time at DelphX, with our revenue phase now in sight, a motivated pool of potential customers ready to try our products, and a high-margin, high-leverage model targeting an underserved market. With these attributes, we have the ability to become profitable early in our deployment phase, with margins similar to SaaS (Software as a Service) or other transaction-oriented Fintech companies when we reach scale. allows us to benefit from an increased volume of transactions, without exposing us to the risks of the underlying obligations.
As a reminder, DelphX CPO/CRN products are structured as private placement securities, which makes them acceptable for use by managers who cannot or do not want to use traditional derivatives or swaps. The initial target market is large, currently estimated at over $15 trillion in credit default swaps and high quality US corporate bonds.
About DelphiX Capital Markets Inc.
DelphX is a technology and financial services company focused on the development and distribution of the next generation of structured products. Through its special purpose entity Quantem LLC, the Company enables fixed income dealers to offer new private placement securities that optimally transfer and diffuse credit risk, while enabling the enhancement of yield. The new DelphX securities will enable brokers and their Qualified Institutional Investor (QIB) accounts to structure, sell and make markets competitively in:
- Collateralized put options (CPO) which provide secure default protection for the underlying corporate, municipal and sovereign securities;
- Collateralized Reference Notes (CRNs) which allow credit investors to assume the default exposure of an underlying security in exchange for an increased yield.
All CPOs and CRNs are fully guaranteed and owned by BNY Mellon. CPOs and CRNs are proprietary products created and owned by DelphX Capital Markets.
For more information about DelphX, please visit www.delphx.com.
This press release contains certain “forward-looking statements”. These forward-looking statements involve risks and uncertainties, known and unknown, that may cause actual results or events to differ materially from those expressed or implied by these forward-looking statements, including, but not limited to, business, economy and financial markets. conditions, regulatory uncertainties and demand for our products. The forward-looking statements contained in this press release are based on factors and assumptions regarding, among other things, the state of the capital markets, DelphX’s ability to successfully manage the risks inherent in pursuing business opportunities in the financial services industry, and DelphX’s ability to obtain qualified personnel, equipment and services in a timely and cost-effective manner to grow its business. Any forward-looking statements reflect information available to DelphX as of the date of this press release and, except as required by applicable law, DelphX undertakes no intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or results or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE DelphiX Capital Markets Inc.