Credit Derivatives Brokerages Set to Merge

Creditex Inc. and CreditTrade Inc. said Tuesday they had agreed to merge to boost their position in the credit derivatives market.

The new company will be called Creditex Group Inc., and management anticipates that the company will oversee $2 trillion of credit derivatives trades this year.

Credit derivatives trading allows investors to buy and sell insurance against a company defaulting on its debt. The practice has grown extensively in the past few years.

“By combining the two companies’ complementary strengths, Creditex Group will be best positioned to lead the market in innovation and voice and electronic execution services,” said Sunil Hirani, CEO of Creditex Group Inc.

“Bringing together our market leading positions in Europe and the US in both indices and structured credit will enable us to provide a better and more comprehensive service to our clients,” said Paul Ellis, CEO of CreditTrade, Inc.

“This consolidation of two strong players is welcomed; the combined company will be a major liquidity provider globally across all credit derivative sectors and products,” said Guy America, Head of European Credit Trading at JP Morgan.

The new company will have offices in New York, New Jersey, London and Singapore.