Guaranty Clearing Corporation and Chemoconnect announce clearing and settlement services

04-07-2003: Chicago and Houston - Guaranty Clearing Corporation ("GCC"), a wholly owned subsidiary of the Board of Trade Clearing Corporation, and ChemConnect, Inc. a leader in helping customers optimize their purchasing and sales processes for feedstocks, chemicals, plastics, and related products, announced today that GCC will offer clearing and settlement services for a variety of contracts transacted on ChemConnect's natural gas liquids (NGLs) Commodity Markets Platform, Chalkboard. These services will involve forwards, swaps, and options contracts, with an initial focus on ethane and propane.

Effective this summer, companies will have the option to clear certain transactions via GCC, through the seamless integration of the two networks and the participation of GCC clearing firms. GCC will act as the seller to every clearing firm buyer and the buyer to every clearing firm seller on ChemConnect. As a result, ChemConnect members will achieve greater financial certainty, mitigating industry concerns about counterparty credit risk that have resulted from the combination of an economic downturn and uncertainties about forward trading liquidity in the energy market.

Koch Hydrocarbon LP, which markets and trades gas liquids and olefins worldwide, is an active member of the ChemConnect trading community. "ChemConnect is the most trusted and liquid trading platform for ethane, propane, and other NGLs," said Mark Dobbins, senior vice president of trading for Koch Hydrocarbon. "We see this agreement between ChemConnect and Guaranty Clearing Corporation as a major step to enhancing overall transactional integrity. We believe these services will allow market participants to manage financial risk in the liquids markets as effectively as is done in the most established of commodity markets, such as oil, natural gas and metals."

"ChemConnect has established itself as a leading over-the-counter marketplace for buyers and sellers of chemicals, plastics, and natural gas liquid products," said Michael C. Dawley, Chairman of the Clearing Corporation and GCC. "Clearing for ChemConnect's natural gas liquid products presents a significant opportunity for the Guaranty Clearing Corporation to make an impact in the petrochemical industry. These products are also a natural fit with our existing clearing operations in the energy and metals markets."

"ChemConnect Members rely on us to help them expand their network of trusted trading partners," said John K. Robinson, CEO, ChemConnect. "Working with a market leader like Guaranty Clearing Corporation to clear NGL trades, we are providing a seamless way for companies to streamline existing business and pursue new opportunities. As liquidity in other products continues to evolve, we fully expect that this relationship will be a critical part of ChemConnect's growing risk management offerings."