Asia adopts new CDS coupon conventions

Isda has announced market practice changes to the trading convention for credit default swaps in Japan and Asia ex-Japan that take effect today. These changes include the adoption of standard coupons and full first coupons in CDS transactions.

Going forward, firms will trade Japan CDS with standard coupons of 25bp, 100bp and 500bp and full first coupons. Asia ex-Japan CDS will be traded with standard coupons of 100bp and 500bp and full first coupons.

Over the course of 2009, the industry adopted fixed coupons in North America in April, in Europe in June and for emerging markets throughout Europe, the Middle East, Latin America and Australia/New Zealand in September.