Leading worldwide supplier of technology and data services, Intercontinental Exchange (ICE, Financials) has purchased the American Financial Exchange, an electronic platform enabling direct lending and borrowing among American financial institutions. Announced on Tuesday, the agreement transfers complete control of AFX from private markets asset firm 7RIDGE.
Neither likely to affect ICE’s financial outcomes for 2025 nor its deleveraging and capital return policies is the purchase. The relocation seeks to combine AFX’s activities with ICE’s current systems, thereby improving services for regional, community, and minority-owned banks.
Operating the American Interbank Offered Rate, a benchmark representing real unsecured borrowing costs among more than 1,000 American financial institutions, AFX is Serving approximately 240 membersincluding banks and non-banksthe exchange represents 25% of the total assets of the United States banking industry.
Introduced in 2015, AFX seeks to improve interbank lending market openness and efficiency. Its American benchmark offers a credit-sensitive substitute for many frequently used interest rate benchmarks.
The purchase reinforces ICE’s leadership in markets for indices, futures, and options. Right now, ICE supports $2 trillion in combined active and passive strategies as well as over $670 billion in assets under management across passive managed products. To lower lender and borrower expenses, the firm also keeps expanding its mortgage network, covering the life cycle of U.S. house loans.
Operating many exchanges, including the New York Stock Exchange, Atlanta-based ICE offers financial technologies meant to improve asset class transparency and efficiency.
7RIDGE, which owned AFX prior to the sale, invests in transformative technology for financial services. The deal’s specifics were kept under wraps.
This article first appeared on GuruFocus.
