FTSE Group and TMX Group have signed a definitive agreement to combine their fixed-income index businesses in a new joint venture.
The new FTSE TMX Debt Capital Markets will one of the largest fixed-income exchange traded fund index providers globally. Together, these indices are used as benchmarks for more than $1 trillion in fixed-income assets.
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TMX Datalinx is TMX Group’s information service division. Its fixed-income index business, called PC-Bond, will be combined with FTSE’s existing international fixed-income index business upon completion of the deal.
FTSE will own a 75% majority stake in the joint venture, with TMX Group holding a 25%. The transaction will significantly strengthen FTSE’s position in fixed income, the second largest asset class globally with approximately $13.7 trillion invested.
In addition to holding a 25% controlling interest in the joint venture, TMX Group will receive $112.2 million. This will be funded from existing LSEG cash resources.
“The fixed income market represents a significant growth opportunity for FTSE,” says Mark Makepeace, CEO of FTSE & LSEG Director of Information Services. “To accelerate our expansion into North America, we’ll be establishing an office in Toronto.”
“This transaction provides TMX Datalinx with a new global presence in the fixed income index business,” says Eric Sinclair, president of TMX Datalinx and group head of Information Services at TMX Group.
Demand for fixed-income indices continues to grow rapidly, driven by the need for multi-sourced prices, high governance standards and low cost strategies.
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