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LCH.Clearnet posts record FFA clearing volumes as it announces the launch of its FFA options clearing service

London, 5 February 2008

LCH.Clearnet is pleased to announce another record month for cleared volumes in its OTC Freight Forward Agreement (FFA) clearing service.  Cleared volumes hit over 118,000 lots in January, representing an 18% increase over the previous record established in November 2007.  Open interest now stands in excess of 185,000 lots.

The demand for clearing in FFA’s has soared over the last few months on the back of unprecedented price volatility.  Cleared volumes in the Dry market now account for around 60% of total traded Dry FFA volumes, and LCH.Clearnet handles over 80% of these volumes. Last year, LCH.Clearnet cleared a total of 434,000 lots, representing a notional value of over $25bn.

These record volumes coincide with LCH.Clearnet’s extension of its clearing service to cover FFA options on Friday 8 February 2008. This will provide further counterparty risk benefits to this rapidly growing sector of the FFA market.  The routes initially covered will be the three main dry timecharter routes: Panamax, Capesize and Supramax. This price competitive service will allow market counterparties to offset their cleared option positions against  their underlying cleared swaps positions, thus further optimising their risk management exposure.

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Editors Notes

LCH.Clearnet is currently owned 67.6% by users, 17.8% by exchanges with the balance of 14.6% being held by Euroclear. Upon completion of the Euronext share buy-back programme by 2009, the Group will be owned 73.3% by users, 10.9% by exchanges and 15.8% by Euroclear.

LCH.Clearnet is committed to operating under strict principles of non-discrimination across its user base. LCH.Clearnet serves major international exchanges and platforms, equity, exchange-traded derivatives, energy, interbank interest rate swaps markets and the majority of the Euro-denominated and sterling bond and repo markets.