Dealers can now structure and sell new credit default protection and tailored debt securities on demand – without committing capital
NEW YORK – JANUARY 24, 2019 – DelphX Capital Markets Inc. (TSXV:DELX) (“DelphX”) today unveiled its new Cloud-based platform in which fixed income dealers can structure new 144A securities that optimally meet the investment, hedging and speculation needs of their institutional customers. Through the platform dealers can customize the terms of each new security they sell, and make markets in all outstanding issues, without incurring capital costs or inventory limitations.
The streamlined process enables dealers to design a new security while concurrently negotiating its sale with potential purchasers. Included among the available security forms are: a) put options that provide pre-funded protection against loss from a credit event involving a referenced underlying issue; and b) enhanced-yield notes linked to the performance of a 3rd party corporate, municipal, sovereign, structured or other credit issue. All securities originated on the platform will be collateralized by cash and investment grade debt securities held in custody by an independent custodian.
“Our system is the first and only source of pre-funded default protection and is designed to restore the ability of dealers to profitably provide cost-effective protection and robust credit liquidity – with no adverse balance sheet impact.” said Larry Fondren, DelphX’s Founder and CEO. “It also enables dealers to structure new securities that can be exchanged with counterparties for outstanding CDS contracts – providing superior protection to customers and increasing the capital, inventory capacity and ROTE of dealers.”
DelphX is a technology and financial services company focused on optimizing fixed income markets. Its cloud-based solution employs proprietary distributed-ledger technology, actuarial science and reinsurance protocols to facilitate optimal diffusion of credit risk. The new DelphX platform will be regulated by the SEC and operated by DelphX Services Corporation, a FINRA member firm, to facilitate the origination and trading of:
- Covered Put Options (CPOs) that provide secured default protection for underlying corporate, municipal and sovereign securities, with each CPO strike-price equaling the par value of its underlying security; and
- Covered Reference Notes (CRNs) that enable credit investors to take on the default exposure of a single underlying security or optionally participate in a pool of diversified risks that broadly diffuses the impact of credit events.
All CPOs and CRNs will be transparently administered within DelphX’s immutable distributed ledger. A traditional book-entry record of each security will also be maintained in parallel by an independent issuing and paying agent to provide additional transparency and efficiency.
For more information about DelphX, please visit www.delphx.com.
Larry Fondren, Founder & CEO
DelphX Capital Markets Inc.
This news release contains certain “forward-looking statements” including, without limitation, statements regarding the launch of the DelphX facility. Such forward-looking statements involve risks and uncertainties, both known and unknown. The results or events depicted in these forward-looking statements may differ materially from actual results or events. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding and are implicit in, among other things: the state of the capital markets, tax issues associated with doing business internationally, the ability of DelphX to successfully manage the risks inherent in pursuing business opportunities in the financial services and Blockchain industry, and the ability of DelphX
to obtain qualified staff, equipment and services in a timely and cost-efficient manner to develop its business. Any forward-looking statement reflects information available to DelphX as of the date of this news release and, except as may be required by applicable securities laws, DelphX disclaims any intent or obligation to update 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.