CME to acquire credit derivatives data provider

NEW YORK (Reuters) - CME Group Inc CME.N said on Tuesday it is acquiring Credit Market Analysis Ltd, a provider of credit derivatives data, as the exchange looks to bolster its business in the fast-growing market.

CME offers credit derivatives contracts, but trading volume has typically been low for these products. Buying Credit Market Analysis, which provides credit derivatives data to asset managers, may help the exchange understand the market better, an analyst said.

"CME is very much on the outside looking in at the credit derivatives market," said Edward Ditmire, an analyst with Fix- Pitt, Kelton. "It's a tough market to crack and this (deal) bolsters CME's chances."

IntercontinentalExchange Inc, (ICE.N: Quote, Profile, Research) a commodities exchange focusing on energy markets, bought Chatham Energy Partners for similar reasons last year, Ditmire said. Chatham Energy is a brokerage focusing on over-the-counter energy options.

Credit derivatives contracts have typically traded over- the-counter. Ditmire does not anticipate that credit derivatives trading will migrate to the exchanges anytime soon, but he said it was possible that a "major event" such as Bear Stearn's recent meltdown could spark a migration.

"As financial institutions appear less credit worthy, central clearing on the exchanges becomes more compelling," he said.

The credit derivatives market is one of the fastest-growing segments of the over-the-counter derivatives market. According to the International Swaps and Derivatives Association, the notional amount outstanding of credit derivatives had reached $45 trillion in July 2007, more than triple its size in mid- 2005.

CME is buying 100 percent of Credit Market Analysis, but the terms of the deal were not disclosed.

Lehman Brothers advised CME Group, while Jefferies & Co advised Credit Market Analysis.

(Reporting by Phil Wahba; Editing by Andre Grenon)