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

Standard & Poor’s Launches Evaluations for Euro ABS/MBSs

Subscribe to our newsletter

Standard & Poor’s has unveiled a new bond evaluations pricing service catering to the European structured finance marketplace. The move is aimed at filling a gap in the marketplace, which is plagued by lack of transparency particularly for illiquid asset- and mortgage-backed securities.

The move marks Standard & Poor’s entrance to the European bond evaluations marketplace, a segment currently dominated by Interactive Data Corp.’s FT Interactive Data and recently targeted by newcomer Reuters. Standard & Poor’s chosen specialist target marketplace, bond evaluations for structures finance, was a key area of concern identified by
A-Team Group’s Fixed Income Pricing: Are Evaluations Gaining Value? survey, which was published last autumn and sponsored by Reuters.

Standard & Poor’s reckons its new Evaluated Pricing Service is the first of its kind to use cash-flow analysis and modeling to evaluate prices for European asset-backed and mortgage-backed securities. As such, the service bases its pricing on the analysis of these securities’ underlying collateral and cash flows, as well as on current market data.

This approach marks a departure from the traditional valuations method among portfolio managers of calling traders, brokers and originating banks for pricing. This can cause problems, resulting in stale prices and patchy coverage for illiquid securities.

According to Peter Jones, director of European securities evaluations at Standard & Poor’s, despite the rapid growth in popularity of structured finance products in Europe in recent years, there remains a relatively illiquid secondary market, which creates problems for transparency and consistency of valuation for many structured bonds for institutions seeking to mark to market.

A range of regulatory initiatives is set to impact requirements in this area. These include Basel II, MiFID, IAS39 and UCITS III, which require holdings to be marked to market on a regular basis. Standard & Poor’s also cites the U.K. Financial Services Authority’s Financial Risk Outlook 2006, published in January, which high-lighted operational risks arising from opaque pricing of illiquid securities.

Jones says that until now Europe has lacked a models-based source for pricing illiquid structured finance deals. In the U.S., Intex Solutions provides a model-based approach for valuing asset-backed, mortgage-backed and collateralized mortgage obligations. By capitalizing on the lack of an Intex equivalent in Europe, Standard & Poor’s hopes to be able to seize a market segment that many acknowledge is seriously underserved. As well as pricing for fixed-income derivative instruments, the A-Team survey identified the lack of a standard pricing mechanism for structured finance deals as an obstacle to liquidity for that market in Europe.
For Standard & Poor’s, the new service represents an opportunity for it to exploit the assets of its various operating units. The Standard & Poor’s Evaluated Pricing Service will make use of terms and conditions data collected by the Standard & Poor’s ratings agency in the course of its research with respect to bond issues. The new service will also benefit from data normalization and standardization functions performed by an Indian affiliate.

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: Unlocking value: Harnessing modern data platforms for data integration, advanced investment analytics, visualisation and reporting

4 September 2025 10:00am ET | 3:00pm London | 4:00pm CET Duration: 50 Minutes Modern data platforms are bringing efficiencies, scalability and powerful new capabilities to institutions and their data pipelines. They are enabling the use of new automation and analytical technologies that are also helping firms to derive more value from their data and...

BLOG

A (Free) Practical AI Handbook for Capital Markets Professionals

Artificial Intelligence (AI) has swiftly transitioned from a promising concept into an operational reality across the capital markets. Senior executives, compliance leaders, and technology specialists are already well-acquainted with the potential of AI to streamline processes, enhance decision-making, and open new competitive opportunities. Yet, the current challenge isn’t about grasping AI’s transformative potential – it’s...

EVENT

TradingTech Summit London

Now in its 14th year the TradingTech Summit London brings together the European trading technology capital markets industry and examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

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...