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A-Team Insight Blogs

Experian and S&P’s FIRMS Partner for Securitised Loan Market

In yet another addition to its portfolio this month, Standard & Poor’s Fixed Income Risk Management Services (FIRMS) business has partnered with credit data and analytics solution provider Experian Capital Markets to provide investors with more data on the individual loans backing US mortgage backed securities (MBS). The two vendors have established a strategic alliance aimed at improving transparency in the securitised loan market by integrating Experian’s credit data and analytics with FIRMS’ securitised loan data and models.

The joint offering has a particular focus on the individual loans that are packaged in MBS, says David Goldstein, managing director at FIRMS. “Securitised loan investors need to be able to drill down to the foundation of each individual loan in their portfolios to gain a truly comprehensive picture of their risk exposures. Through our partnership with Experian, we will be able to provide investors with an amazing level of granularity on the fundamental risks in each loan and the ability to benchmark their portfolios against this data,” he explains.

In the first step of the partnership, Experian Capital Markets will connect consumer credit information and attributes to S&P’s US residential mortgage backed securities (RMBS) loan level data feed product, RMBS Edition.

“The goal of our collaboration is to provide investors with the transparency needed to value structured finance products and to make more informed buy and sell decisions,” adds Ethan Klemperer, senior vice president and general manager, Experian Capital Markets. “Our partnership with Standard & Poor’s is a critical step in improving market efficiencies needed to restore liquidity and investor confidence.”

Providing greater transparency into securitised instruments for risk management purposes has been a popular trend within the vendor community this year, as firms struggle to meet regulators’ stricter requirements in the post-crisis environment. S&P’s structured finance platform, ABSXchange, has also recently been upgraded to this end by increasing its instrument coverage.

The FIRMS analytics and research unit, which is separate from S&P’s ratings business and is headed by ex-Thomson Financial and Bloomberg heavyweight Lou Ecclestone, has been all guns blazing this year in order to garner a greater share of the data solutions market. Earlier this month, FIRMS indicated it is launching a new enterprise level data feed solution, Global Data Solutions, which purports to provide users with a range of data and analytics to allow them to evaluate and monitor the financial instruments in their portfolios.

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