LCH.Clearnet has launched clearing for Spanish government bonds and repos on 17 December 2010. According to the company, on its first day, the service cleared over EUR4bn in notional volumes.

The new service is operated by LCH.Clearnet’s bond and repo service with trades settling at Iberclear, the local CSD.

Initially, trades will be accepted via ICAP, with other trading platforms to be connected early in 2011.

The offering complements LCH.Clearnet’s RepoClear’s Spanish debt service launched in August, which allows trades to be settled at either Clearstream Banking Luxembourg or Euroclear bank, the international CSDs.

Spanish bonds are accepted by LCH.Clearnet as collateral to cover margins. A direct account with the Bank of Spain can also be used by Spanish clearing members to facilitate the payment of cash movements. Cross margining is applied between French, Italian and Spanish debts, said LCH.Clearnet.

LCH.Clearnet CEO Christophe Hemon said there has been strong demand from the Spanish trading community for LCH.Clearnet to launch this service which allows settlement in Iberclear, the Spanish CSD.

"Clearing members using the service will benefit from reduced counterparty risk and trading anonymity amongst others benefits," Hemon added.