Markit and RBS working on new CMBS index
Financial information services firm Markit is working to create a new commercial mortgage-backed securities index that could possibly perpetuate issuance in the space. The Royal Bank of Scotland said this week it is actively working with Markit to create an enhanced version of the TRX.NA index, called TRX2.0. TRX2.0 will supplement the restructured CMBS 2.0 market — that is, commercial securitization deals done after the housing crisis. The 2.0 index would provide a reference point for the last cash flows concerning triple-A rated CMBS. Simply put, it would mark CMBS performance and default trends. Single borrower deals would be excluded from the index, RBS said. RBS said this index could possibly offer an effective hedge against basis risk as well as motivation for new CMBS issuance. "Such an index could enable originators to better hedge the basis risk of the largest part of CMBS 2.0 deals, the last cash flow triple-A bond," RBS commented. "If effective, the new index could help serve as an important catalyst for the further growth of the CMBS market." Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.