Press Release
Principia standardizes integration, ongoing surveillance and management of collateral performance data
Principia SFP eases processing and analysis of performance data as regulators mandate institutions to know and understand their structured finance investments
New York, NY – October 27, 2009 - Principia Partners, the leading solution provider for the management and administration of structured finance portfolios, today announced the launch of Principia Structured Finance Platform (Principia SFP) Version 6.2. The latest upgrade helps financial institutions and investment managers to track, monitor, analyze and report on the collateral pool performance of any fixed income asset, including ABS, RMBS, CMBS, CDOs, CLOs and Covered Bonds. It provides a standardized, end-to-end operational infrastructure to normalize and more efficiently manage ongoing collateral performance data, regardless of the asset class or data source.
A new standard interface into Principia SFP resolves the challenges and inefficiencies associated with integrating performance and cash-flow data into the ongoing management and oversight of structured finance portfolios. The system automates the processing of external data from any independent performance data provider (e.g. Intex, Lewtan, Markit, Bloomberg, Trepp, Moody’s, S&P etc.) or bond trustee, as well as proprietary data resulting from the internal credit analysis of loan-by-loan information. Data for multiple deals, from disparate data sources, is integrated on a single platform to display accurate and consistent performance metrics on-demand, across the business. Organizations can manage and maintain compliance with risk limits, perform rigorous stress tests and deliver timely reports detailing performance measures at the portfolio, deal, tranche or collateral level.
The need to unify the control, management and risk surveillance of structured finance operations is increasingly being highlighted by the industry. Recommendations by working groups and industry bodies have helped to shape regulatory proposals such as the new Basel II Securitization Framework, as well as the conditions for participation in US and UK government initiatives such as the US Term Asset-Backed Securities Loan Facility (TALF) and Public Private Investment Program (PPIP). It is no longer acceptable to manage structured finance assets without the sufficient controls and operations in place to support sophisticated portfolio management.
The Basel II Framework Enhancements state that in order to qualify for the new risk weightings, institutions: “Must be able to access performance information on the underlying pools on an ongoing basis, in a timely manner. Such information may include, as appropriate: Exposure type; percentage of loans 30, 60 and 90 days past due; default rates; prepayment rates; loans in foreclosure…”
With Principia SFP Version 6.2, portfolio managers, risk analysts and compliance staff have the flexibility to choose from over 350 pre-defined performance measures to ‘slice and dice’ fixed income and structured credit portfolios. This includes the ability to monitor, analyze and report on loan-to-value ratios and cumulative deal level losses; to stress test default, recovery and prepayment rates; and the ability to view collateral pool delinquency rates (e.g. 30, 60 or 90 days), across any stratification of that pool. Clients can also add unique performance measures, as demanded by the requirements of their business.
“We are seeing a growing demand from financial institutions and investment managers looking to reduce the inefficiencies and risks associated with managing and integrating multiple databases and data sources for different structured finance deals,” said Douglas Long, EVP business strategy, Principia Partners. “Policy makers are making sure that organizations with long term investment goals involving securitized assets have a robust operational framework in place to really understand their investments on an ongoing basis. That’s not possible on spreadsheets and systems that aren’t developed specifically to adapt to the dynamic requirements of structured finance.”
The Financial Stability Board, advisors to the G20, reiterated the importance of the Basel II Framework Enhancements to supervisors and regulators last month. Their address also highlighted the International Organization of Securities Exchange Commission’s recommendations on how to better inform and protect investors by: “Including initial and ongoing information about underlying asset pool performance.”
Principia SFP V6.2 is available immediately and can be provided as a stand-alone system or as an upgrade for existing Principia SFP users.
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