Bank One Corporation - Page 198

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          rating of AA.19  No service reported regular and reliable quotes            
          on swaps negotiated with lower rated counterparties.                        
               Upon receiving these quotations from the dealers, the                  
          brokers disseminated publicly the best interdealer price                    
          quotations by way of electronic broker quotation services such as           
          Bloomberg, Reuters Monitor Money Rates Service, or Associated               
          Press/Dow Jones Telerate Service.  These services, to which swaps           
          dealers had access on their “dealer screens”, normally made it              
          unnecessary for a dealer to shop around when the dealer wished to           
          enter into a swap transaction because the dealer knew that the              
          quoted rate was a competitive price.  If a dealer wanted to enter           
          into a specific swap, the dealer could contact a broker, and the            
          broker would call one or more dealers and confirm their quotes on           
          the specified swap.  The broker then reported back to the first             
          dealer (the one wanting to enter into the particular swap) on the           
          best quote that the broker had obtained.  If that dealer                    
          ultimately entered into a swap agreement with another dealer                
          supplied by the broker, the broker received a fee for its                   
          services based on a percentage of the notional amount.                      


          19 Participants in the swaps market generally rated                         
          counterparties using standard credit ratings obtained from                  
          private credit rating agencies such as Moody’s and Standard &               
          Poor’s (S&P).  Each agency had its own set of ratings.  The                 
          ratings offered by S&P for long-term debt were (from best to                
          worst) AAA, AA+, AA, AA-, A+, A, A-, BBB+, BBB, BBB-, BB+, BB,              
          BB-, B+, B, and B-.  (For clarity, we refer only to the S&P                 
          ratings.)  In 1992, most swaps dealers had a credit rating of A             
          or better, and many of those dealers had ratings of AA or AAA.              




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Last modified: May 25, 2011