Credit Suisse forges multi-year stategic alliance with Creditex
IFR, July 24, 2000

Credit Suisse First Boston last week forged a multi-year strategic alliance with Creditex, the online credit derivatives trading platform. Through the arrangement, CSFB becomes an equity participant in Creditex. It will also start directing its clients to use the site to transact single-name credit default swaps. CSFB is the third largest credit derivative dealer.

The deal will enable CSFB's credit derivative sales force to concentrate on capturing the higher margins to be had in the structured credit products, said Sanjeev Gupta, head of credit derivatives at CSFB in New York. The salespeople also will be responsible for following-up with clients who use the site, he noted.

"There will always be special requests from clients. [We think] this is the best use of our salesforce," he added. CSFB's traders have been using the trading platform since its inception in March.

The strategic alliance also calls for interfacing CSFB's trading systems to Creditex to post trade prices, said Gupta, noting that the systems bridge will be up and running in a few months. CSFB would like to take the link beyond pricing, so that trade information is automatically fed into CSFB's ledger, he added.

Creditex currently is involved in its third round of financing and is in talks with a variety of other prospective partners, said Dik Blewitt, head of marketing at Creditex in New York, declining to elaborate. JP Morgan, Deutsche Bank, Societe Generale, Bank of Montreal, WestLB, Canadian Imperial bank of Commerce, Capital Reinsurance, Pacific Reinsurance, and Morgan Stanley Dean Witter are among the firms that have already taken equity stakes in the online platform."

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