LONDON - The Loan Syndications and Trading Association said last week that the International Swaps and Derivatives Association (ISDA) has formed a working group that will determine the most appropriate approach to creating a noncancelable loan-only credit default swap (LCDS) product in Europe, which should encourage more trading in the market. The announcement was made at the LSTA conference held here last week.

In the U.S., the desire to create something that could be sold led to the creation of noncancelable products, but in Europe, the motivation has been driven by a desire to create a hedging instrument. However, that sentiment is shifting, and the market has started to see more single-loan trading based on new players entering the market. In fact, panelists at the conference said that there has been more of a desire from the market to create a trading product for Europe.

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