Yet another credit derivative index is being created by data provider Markit! The new index (called MCDX) will track the creditworthiness of 50 US investment-grade municipal bonds. These bonds have been all over the media recently thanks to the downgrading threat (and actual downgrades last week) to municipal bond insurers such as MBIA and Ambac.
As a keen supporter of the commoditization of the credit market I cannot but applaud this initiative. Of course, it remains to be seen if the liquidity will improve compared to that of the single-name market.