BayernLB Starts Clearing OTC Interest Rate Swaps
with SwapClear

Munich, 31 July 2012

BayernLB announced today that it has become a member of LCH.Clearnet Limited’s market-leading SwapClear interest rate swap clearing service. The move strengthens the position of the bank by providing a broader range of clearing services to its clients ahead of the introduction of the European Market Infrastructure Regulation (EMIR) on over-the-counter derivatives clearing. Being a member of SwapClear will also enable BayernLB to better manage its risk and more efficiently deploy capital, and meeting the emerging global regulatory standards.

BayernLB is the leading Bavarian commercial bank for large and middle-market corporate customers in Germany and Europe and also for retail customers. It is a member of the Sparkassen-Finanzgruppe in Bavaria and is a high-performance regional bank with a focus on European and international expertise.

“Not only does SwapClear membership provide an effective way to meet the upcoming clearing regulations, but it opens up access to a deep pool of global liquidity. The operational and capital efficiencies that the SwapClear service provides will play an important role in helping us better service the needs of our customers throughout the region,” said Oliver Dressler, head of BayernLB’s Treasury Products.

“We are delighted that BayernLB has recognised the risk management benefits and breadth of product choice available on SwapClear. This partnership not only provides a sound footing for the expansion of our buy-side business across continental Europe, but illustrates the increasing support that SwapClear is seeing across the German banking community,” said Heiko Cassens, director of German, Nordic and Eastern Europe at SwapClear.

SwapClear was launched in 1999 by LCH.Clearnet, a CFTC-regulated derivatives clearing organization since 2001. The 1 million trades in SwapClear have an aggregate notional principal amount of more than $314 trillion, with a further $136 trillion of cleared transactions removed through multilateral trade compression. SwapClear has also cleared a cumulative client notional of over $1.78 trillion.

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Contact:

Franziska Roederstein    Tel.: + 49 (0) 89 21 71-2 7176
BayernLB    Email: [email protected]

Nina Truman    Tel.: + 1 212 513 5608
SwapClear, LCH.Clearnet   Email: [email protected]

About BayernLB:

BayernLB is the leading Bavarian commercial bank for large and middle-market corporate customers in Germany and Europe and also for retail customers. It is a member of the Sparkassen-Finanzgruppe in Bavaria and is a high-performance regional bank with a focus on European and international expertise.

About SwapClear

Established more than 12 years ago, SwapClear is LCH.Clearnet’s market-leading interest rate swap clearing service. To date, it has cleared more than 1.5 million OTC interest rate swap trades in 17 of the world’s largest currencies, and its membership currently stands at 66. SwapClear has a total notional outstanding of more than $314 trillion, with an additional $136 trillion eliminated through multilateral trade compression using TriOptima’s triReduce service. SwapClear has also cleared a cumulative client notional of over $1.78 trillion and is the only OTC clearing service to have successfully handled a significant OTC interest rate swap default, doing so when it resolved Lehman Brothers’ $9 trillion IRS default in 2008, resulting in no loss to any market participants. swapclear.com

About LCH.Clearnet

The LCH.Clearnet Group is the leading independent clearing house group, serving major international exchanges and platforms as well as a range of OTC markets. It clears a broad range of asset classes, including securities, exchange-traded derivatives, commodities, energy, freight, foreign exchange derivatives, interest rate swaps, CDS and euro- and sterling-denominated bonds and repos, and works closely with market participants and exchanges to identify and develop clearing services for new asset classes.

A clearing house sits in the middle of a trade, assuming the counterparty risk involved when two parties (or members) trade. When a trade is registered with a clearing house, that clearing house becomes the legal counterparty to the trade, ensuring financial performance of the trading parties; if one of the parties fails, the clearing house steps in. By assuming the counterparty risk, the clearing house underpins many important financial markets, facilitating trading and increasing confidence within these markets.

Initial and variation margin (or collateral) is collected from clearing members; should they fail, this margin is used to fulfil their obligations. The amount of margin is decided by the clearing house’s highly experienced risk management teams, which assess a member’s positions and market risk on a daily basis. Both the soundness of the risk management approach and the resilience of its systems have been proven in recent times. LCH.Clearnet is regulated or overseen by the national securities regulator and/or central bank in each jurisdiction from which it operates.

LCH.Clearnet Limited is a wholly-owned subsidiary of LCH.Clearnet Group Limited