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 the leading software provider for the management and administration of structured finance and credit investment operations. Some of the largest investors in structured credit ABS, MBS and CDOs use Principia SFP as the operational backbone for their portfolios. It enables them to consistently manage, analyze and report on these investments and their associated liabilities and hedges. On a single platform, clients can perform the full range of portfolio management, cashflow and exposure analysis, compliance, risk reporting and accounting activities demanded by their business. Operational inefficiencies associated with using multiple spreadsheets and undedicated systems are reduced by integrating and streamlining these activities on a unified platform that addresses challenges unique to the management of structured finance operations.
Principia SFP’s powerful analytics and ability to interface with, combine and consistently apply deal, cashflow and performance data from the leading industry providers empowers managers to know and understand their investments. On an ongoing basis, users have the control to track, analyze and evaluate risk exposures at the deal, tranche or collateral level and gain a consolidated view of risk across any number of portfolios. The fully auditable operational environment provides the flexibility needed to adapt to changing management, regulatory and accounting mandates and ensure transparency is consistently delivered to investors at every stage of the portfolio lifecycle.
For 15 years, the platform has been used by global commercial banks, insurance companies and investment managers, as well as supporting off-balance sheet operations such as ABCP conduits.
Principia Partners is headquartered in New York, with a European office in the City of London and a technology center in Conshohocken, Pennsylvania.
For press information contact:
Ben Jarrold
Tel: + 44 (0) 20 7618 1370
Email: Jarrold@ppllc.com