About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Finance and Insurance Firms Turn to Third-Party Service Providers for Corporate Credit Valuations

Subscribe to our newsletter

Global banks, asset managers and insurance companies are adopting innovative approaches to valuing high-yield corporate credit in response to regulatory and client demand for transparent, defensible and timely evaluated pricing. Instruments under particular scrutiny include high-yield bonds, leveraged loans and collateralised loan obligations, all of which can be hard to price and all of which have their own idiosyncrasies in liquidity, transparency and pricing methodologies.

As regulations such as ASC 820/IFRS 13, Basel III, Solvency II and AIFMD come into effect over the next 12 months, requiring greater transparency in valuing illiquid cash and hard-to-price derivative instruments in fixed income portfolios, many firms are looking beyond in-house pricing processes to third-party, specialist valuation services that can offer independent and timely pricing based on relative value mark-to-model approaches.

A-Team Group has been working with Bloomberg to identify the difficulties of valuing high-yield corporate credit in an increasingly regulated market and to propose solutions to the problems. A White Paper authored by A-Team Group and sponsored by Bloomberg can be downloaded free here.

The paper describes the classification of all traded instruments into three levels depending on the amount of observable market data that is available to derive a valuation. In terms of corporate credit instruments, high-yield corporate bonds are generally the most transparent and straightforward to value. Leveraged loans are more difficult and are often valued on the basis of indicative market quotes from major dealers. The market for collateralised loan obligations is even more opaque, making them very difficult to value with any accuracy.

These instruments are prime targets for third-party specialist services, such as the Bloomberg Valuation Service, that can offer the transparency of market data inputs and pricing methodologies needed to defend valuations in response to queries from regulators, auditors and investors. Vendor services also have the scope to value a wide range of asset classes, expert teams to tackle hard-to-price instruments, sophisticated systems for timely delivery of valuations, and independence – elements of evaluated pricing that are becoming increasingly critical to regulatory compliance.

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: Are you making the most of the business-critical structured data stored in your mainframes?

17 June 2025 10:00am ET | 3:00pm London | 4:00pm CET Duration: 50 Minutes Fewer than 30% of companies think that they can fully tap into their mainframe data even though complete, accurate and real-time data is key to business decision-making, compliance, modernisation and innovation. For many in financial markets, integrating data across the enterprise...

BLOG

AI in Finance: Key Insights from the SEC’s Landmark 2025 Roundtable

In late March, the U.S. Securities and Exchange Commission (SEC) hosted a landmark roundtable on artificial intelligence (AI) in financial services. Held in Washington, D.C., the event brought together regulators, technologists, market participants, and legal experts to explore the evolving landscape of AI – from transformative innovation to systemic risk. This wasn’t about rulemaking –...

EVENT

AI in Capital Markets Summit London

The AI in Capital Markets Summit will explore current and emerging trends in AI, the potential of Generative AI and LLMs and how AI can be applied for efficiencies and business value across a number of use cases, in the front and back office of financial institutions. The agenda will explore the risks and challenges of adopting AI and the foundational technologies and data management capabilities that underpin successful deployment.

GUIDE

AI in Capital Markets: Practical Insight for a Transforming Industry – Free Handbook

AI is no longer on the horizon – it’s embedded in the infrastructure of modern capital markets. But separating real impact from inflated promises requires a grounded, practical understanding. The AI in Capital Markets Handbook 2025 provides exactly that. Designed for data-driven professionals across the trade life-cycle, compliance, infrastructure, and strategy, this handbook goes beyond...