Press Release
Principia launches V5 release for structured finance and credit operations
New version provides advanced platform for emergence of Credit Derivative Product Companies
Jersey City, NJ – August 15, 2006 – Principia Partners, a leading provider of advanced end-to-end processing solutions for structured finance and capital markets, today announced the release of V5, its most comprehensive solution for managers and administrators of structured finance operations.
The latest release of Principia SFP (Structured Finance Platform) provides new product coverage and functionality. A new user interface and navigation scheme is designed to facilitate and automate the manually-intensive tasks associated with managing ABCP conduits, securities arbitrage conduits, structured investment vehicles (SIVs) and credit derivative product companies (CDPCs).
A significant part of the enhanced application was focused on developing a flexible structured finance operations framework. With broad coverage of first and second generation credit derivatives and structured credit instruments, Principia SFP meets the complex portfolio management and operational requirements of CDPCs. These highly-rated structured finance operating companies serve as counterparties to other financial institutions in credit default swaps or specialized insurance policies against credit events.
“CDPCs represent an important growing trend in the structured finance world, merging the best practices and economic benefits of credit derivatives and securitization,” states Dr Douglas Long, EVP – Business Strategy at Principia. “It is an emerging market, and Principia delivers a solution that enables new entrants to quickly leverage first-to-market advantages.” Industry analysts are predicting that CDPCs will quickly become a major component in the credit derivatives market. As clients, Principia has several CDPCs and credit investment managers employing similar techniques.
In order to obtain AAA-strength ratings, CDPCs are subject to intense scrutiny from rating agencies prior to their conception and throughout their continuing operation. Similar to other structured finance operating companies such as SIVs, CDPCs must regularly demonstrate compliance with a number of tests on its portfolio. These include asset composition, liability outstanding, capital adequacy, counterparty concentration, liquidity and market rate sensitivity tests.
“Principia SFP enables CDPCs to meet the rigorous demands of compliance reporting and accounting in an automated manner, flowing seamlessly from portfolio management and other front office activities,” states Long. A strategic partnership with Markit, the leading provider of credit default swap data, further enhances Principia’s automated credit derivatives trading and operations platform.
“Advances in credit arbitrage and structured credit products are occurring at an unprecedented pace, especially with the introduction of credit indices and structured finance indices,” says Long. “Principia SFP V5 provides comprehensive coverage for a broad range of synthetic instruments, including single tranche CDOs, CDS on asset-backed securities (ABSs) in single-name and tranche formats, e.g. synthetic CDOs of ABS.”
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