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New Securities Provide Cost-Effective Non-CDS Solution For Managing Credit Risk

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New Securities Provide Cost-Effective Non-CDS Solution For Managing Credit Risk

PR Newswire

Designed to Meet the Top Priority of Credit Investors – Hedging Risk 

NEW YORK, Sept. 13, 2018 /PRNewswire/ -- DelphX Capital Markets Inc. (DELX.V) ("DelphX") announced today that its Covered Put Option securities have been cited in a new Greenwich Associates report as "a more refined product than single-name CDS" for hedging credit default risk (full report here: www.delphx.com/2018/09/05/credit-hedging-products). Cited are the results of a recent survey of 60 major credit investors in which most indicated that hedging risk is now more important than finding yield or generating alpha.

(PRNewsfoto/DelphX Capital Markets Inc.)

Specifically, 53% of the investors reported that Managing Default and Counterparty Risk is their top priority, with only 38% and 33% respectively identifying Finding Yield and Generating Alpha as their primary focus. Moreover, 57% of respondents identified the Ability to Effectively Hedge Risk as the Credit Market Structure Most Needed to Improve.

"The investor needs reflected in the Greenwich report are fully consistent with our research and underscore the importance of implementing an efficient and collaterally-secured solution. The DelphX ATS and risk-mitigating CPO and CRN securities negotiated and traded therein are designed to optimally meet those needs," said Larry Fondren, DelphX's Founder and CEO. He added, "Now is the time to capitalize on the benefits of this Connected Age by employing technology to broadly and transparently diffuse risk among many market participants."  

About DelphX: 

DelphX is a technology company focused on optimizing fixed income markets globally by transforming how credit capital is secured. Its blockchain-powered solution employs proprietary distributed ledger technology, actuarial science and reinsurance protocols to facilitate optimal diffusion of credit default risks. The new DelphX alternative trading system ("ATS") facility will be regulated by the SEC and operated by DelphX Services Corporation, a FINRA member firm, to facilitate the negotiation, purchase and trading of two new forms of Smart Securities:

  • 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 allow investors to take on exposure to the default risk of a single underlying security or to optionally participate in a pool of diversified risks that broadly diffuses the impact of credit events among all participants.

All CPOs and CRNs will be issued by Quantem Capital Corporation Ltd.("Quantem"), a wholly-owned subsidiary of DelphX, and transparently administered within Quantem's immutable Distributed Ledger. A traditional book-entry record of each CPO and CRN will also be maintained in parallel by Quantem's issuing and paying agent to provide additional transparency and efficiency. 

For more information about DelphX, please visit www.delphx.com.

Forward-Looking Statements

This news release contains certain "forward-looking statements" including, without limitation, statements regarding the launch of the DelphX market. 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.

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SOURCE DelphX Capital Markets Inc.

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