LCH SwapClear extends clearing eligibility to SWESTR and DESTR reference rates

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Summary
  • LCH SwapClear is the first clearing house to offer clearing of Overnight Index Swaps using the DESTR risk free rate
  • Extension of service demonstrates LCH’s commitment to supporting interest rate benchmark reform globally
  • LCH SwapClear offers clearing for interest rate products across 27 global currencies
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LCH SwapClear today announces the service has extended clearing eligibility to SWESTR (Swedish krona Short-Term Rate) Overnight Index Swaps (OIS) and is the first CCP to launch the clearing of DESTR (Denmark Short-Term Rate) OIS. SWESTR is Sveriges Riksbank’s recommended alternative to STIBOR and DESTR has been recommended by Danmarks Nationalbank as the preferred risk-free reference rate in Danish kroner.

Nordea and Danske were counterparties to the first trade cleared through LCH SwapClear referencing DESTR, while SEB and Swedbank were the counterparties to the first cleared trade referencing SWESTR.

The launch further demonstrates LCH’s commitment to supporting benchmark transition in the cleared and bilateral Nordic markets. In September 2022, LCH SwapAgent announced it had registered its first CIBOR/SOFR* cross-currency basis swap between two Nordic banks, Nordea and Danske.

Susi de Verdelon, Head of SwapClear and Listed Rates, LCH Ltd, said: “We are pleased to extend our services to include clearing of SWESTR and be the first CCP to offer clearing for DESTR. LCH is committed to supporting the industry-wide transition to risk free rates and enabling our members and their clients to benefit from strong risk management and increased capital efficiencies.”

Morten Lau Bæk, Managing Director, Head of DKK, EUR Fixed Income & XCCY Trading, Nordea, said: We are delighted to participate in this first with LCH SwapClear. The clearing of DESTR swaps will be a key component in building a liquid market for this product and we look forward to further contributing to its development.”

Eske Traberg Smidt, Managing Director, Fixed Income, Danske, said: “This is a significant development for the Nordic market. Being part of this milestone DESTR trade with LCH SwapClear enables us to achieve further risk and settlement efficiencies in our derivatives portfolios and expand the services we offer our clients.”

Leif Lindahl, Co-Head of Fixed Income, SEB, said: “We are pleased to be one of the counterparties helping to build liquidity in SWESTR-based swaps and will benefit from clearing solutions such as LCH SwapClear that provide access to this liquidity.”

Hamish Darbyshire, Senior Derivatives Trader, Swedbank, said “We are excited to be one of the first Nordic firms who are deriving real benefits from using LCH SwapClear to clear their SWESTR OIS trades, as well as other interest rate swap products. This will allow us to expand and improve our customer offering.”

Learn more about LCH SwapClear here.

* Copenhagen Interbank Offered Rate (CIBOR), Secured Overnight Financing Rate (SOFR) 

For further information
Harriet Leatherbarrow / Nandeep Roopray
Tel: +44 (0)20 7797 1222   
Email: newsroom@lseg.com

About LCH
LCH Limited and LCH S.A. (collectively, “LCH”) are leading multi-asset clearing houses that provide proven risk management capabilities across a range of asset classes. As demand for robust clearing services continues to grow, LCH is committed to maintaining the highest standards of risk management across all our services.

As the markets’ partner, LCH operates an open access model, offering a choice of execution venues, delivering extensive choice and efficiencies to the marketplace.

LCH operates clearing houses incorporated in the UK and France, with offices in the United States and the Asia Pacific region. It offers clearing services across asset classes, including OTC and listed rates; CDS and FX; fixed income; commodities; cash equities and equity derivatives. In addition, SwapAgent Limited serves the non-cleared derivatives market through its SwapAgent service, which extends a number of the efficiencies applicable to clearing to the market, without acting as a central counterparty.

LCH Limited, LCH S.A. and SwapAgent Limited are each majority owned by London Stock Exchange Group PLC (LSEG.L), an international markets infrastructure business that sits at the heart of the world's financial community.

Further information on LCH can be found at www.lch.com