Press Release
Principia Integrates Markit’s ABS Pricing
Enhancement provides customers with access to pricing for 3,500 European securities including ABS, RMBS, CMBS and CDOs
Jersey City, New Jersey – Jan 31, 2006 - Principia Partners LLC, a leading solution provider for the management and administration of structured finance operations, announced today that it has integrated European ABS (Asset Backed Securities) pricing from Markit Group Limited (“Markit”) for the benefit of mutual customers. Markit is the benchmark industry source of independent pricing and valuations for the global financial and energy markets. This enhancement greatly augments the ability of the Principia SFP (Structured Finance Platform) solution to meet the portfolio management and operational processing requirements of structured finance operations as well as those of investment managers of ABS securities.
Markit, a pioneer of daily mark-to-market credit derivatives pricing, recently launched a new service that provides both composite and contributor pricing data on ABS securities issued in the European markets. The only multi-dealer platform for European ABS pricing, Markit’s service is backed by over twenty leading market makers who provide same day bid / offer prices, and the spreads and average life assumptions on more than 3,500 European ABS. The coverage includes European Residential Mortgage-Backed Securities (RMBS), Commercial Mortgage-Backed Securities (CMBS), Asset-Backed Securities (ABS), and cash Collateralized Debt Obligations (CDO).
The integration of Markit’s ABS pricing addresses one of the most critical gaps in the industry: the lack of independent pricing, which results in an inefficient process for end-of-day mark-to-market of ABS portfolios. Principia’s clients are among the largest portfolio managers of ABS/MBS securities and structured credit products. With the Markit data integration, the Principia SFP solution enables these mutual customers to have additional precision and control over the management of their portfolios from deal entry through risk management, compliance and accounting. The solution can also be integrated with Intex ABS/MBS models, thereby providing a comprehensive ABS/MBS management platform that can meet the needs of structured credit investment managers and structured finance operations for more deal transparency, timely position keeping and accurate accounting. Principia’s integration of Markit’s ABS pricing builds on the company’s existing incorporation of Markit’s CDS (Credit Default Swap) data.
“The ability to easily retrieve clean and accurate ABS pricing is more important than ever within the structured finance investment community,” states Dr. Douglas Long, EVP – Business Strategy at Principia. “One of the biggest operational hurdles in managing ABS instruments today is the need to validate prices from dealers, often from multiple independent sources. The process is extremely manual, thus prone to human error, and still requires further manual processing for data scrubbing and preparation, ” he continued.
Once imported, pricing data from Markit can be further handled and
analyzed within Principia SFP’s robust cashflow and exposure
(risk) framework. Users will be able to use prices to imply option-adjusted
spreads as well as calculate risk attributes. Users will also benefit
from the ability to manage ABS products along with liabilities (issuances
or funding instruments) and derivatives on a single platform. This
combination of broad functionality and integration helps to resolve
a core technology issue for many structured finance operations such
as structured investment vehicles and other securities arbitrage
vehicles.
Kevin Gould, Executive Vice President of Markit and Head of
Data Products and Analytics said, "We are pleased to offer mutual
customers independent consensus pricing for the European ABS market,
within the Principia product suite, and hope our efforts will boost
efficiency and transparency in this fast growing asset class.”
Markit expects to extend its ABS pricing service into the U.S. arena later this year.
About Principia Partners
Principia Partners is a leading provider of advanced end-to-end
processing solutions for structured finance and capital markets.
The Principia SFP solution helps structured finance operations
reduce risks and costs associated with their management and administration.
It is a robust end-to-end platform designed to meet the common
needs of structured finance operations, yet has the flexibility
to meet the unique structuring and intensive processing requirements
of the various types of operations. For capital market participants,
the Principia System enables unified portfolio management, risk
management and operations on a single platform that manages a wide
range of vanilla and structured fixed income (including ABS/MBS
and GICs), interest rate, foreign exchange, credit and equity indexed
products. Its sub-ledger facilitates full compliance with both
FAS 133 and IAS 39 accounting regulations.
Principia Partners is headquartered at the Harborside Financial Center, Jersey City, New Jersey, USA with an office at 1 Cornhill in London, UK. See www.principiapartners.com.
About Markit
Markit is the benchmark industry source of independent pricing
and valuations for the global financial and energy markets. Markit
has data contributed by over 50 dealing firms, and its services are
used by 400 institutions globally. Areas of product expertise include
OTC derivatives (credit, equity, FX, rates, inflation, energy, power,
metals and structured products), corporate bonds, syndicated loans,
dividend forecasting, and index and ETF management. Markit has most
recently brought price transparency to the European asset-backed
securities market with the launch of the first independent ABS pricing
service. Markit’s position in the derivative markets has been
acknowledged by the industry with awards from Risk Magazine for Trading
Initiative of the Year 2006 (Credit Event Fixings); ISR’s Editor’s
Award for Innovation 2005; IFR’s Innovation of the Year 2005
(Credit Event Fixings); Financial News’ Best Derivatives Data
Provider 2005; and Institutional Investor’s Operations Management
Award for Vendor of the Year 2005 (RED). For more information about
Markit, see www.markit.com.
For press information contact:
Principia Partners
Shamira Alidina
Write Image
271 Regent Street
London W1B 2BP
shamira@write-image.co.uk
Tel: + 44 (0) 20 7959 5450
Fax: + 44 (0) 20 7493 5499
Email: shamira@write-image.co.uk
Markit
Teresa Chick
Director, Marketing and Communications
Tel: +44 (0) 20 7890 5094
Email: teresa.chick@markit.com