As Fitch ups its game in the asset backed securities (ABS) market, so too is Standard & Poor’s with the upgrade of its structured finance platform, ABSXchange. The platform, which it bought in August 2007, has been undergoing a series of upgrades this year, the latest of which includes access to a complete cash flow model library for all UK master trust deals and increased coverage of EMEA collateralised loan obligations (CLOs) and Australian residential mortgage-backed securities (RMBS).
Since February 2009, ABSXchange’s client base has increased by 40%, says S&P, which, like Fitch, has been aggressively growing its business lines outside of the ratings sector. New clients to sign up to the platform include DnB Nor, BNP Paribas, Rabobank, CDC, Stormharbour, Cohen, ElliottAdvisors, Pramerica and MEAG. So far this year, the ABSXchange user community has grown to more than 300 customers, including those in France, Germany, the Nordics, Italy and Spain, says David Pagliaro, EMEA commercial director for ABSXchange.
ABSXchange was acquired by S&P in 2007 and enables users to retrieve performance data from across the universe of publicly rated, securitised credits. It is part of S&P’s Fixed Income and Risk Management Services (FIRMS) division, which operates separately from S&P Ratings Services and provides market intelligence and analytics for risk driven investment analysis. The division is headed by ex-Thomson Financial and Bloomberg heavyweight Lou Ecclestone, who was appointed to head the business at the start of last year.
“This new version of ABSXchange will allow users to perform more rigorous examinations of structured finance transactions thanks to additional cash flow and portfolio analytics functionality, and it offers a much expanded library of cash flow modelled transactions. Indeed, ABSXchange is establishing itself as the leading structured finance platform in Europe, and a benchmark for the global industry,” says Pagliaro.
The latest series of enhancements enable users, which include investors, risk managers and market regulators, to create hypothetical collateral pools for more robust cash flow projections and to aggregate cash flows at the portfolio level, says the vendor. The platform as a whole supports investor requirements with respect to today’s new regulatory accounting requirements (FASB 157/IAS 39) and aims to enable transparent operational and risk management processes, as delineated by IFRS 7, the Bank for International Settlements (BIS) and the UK Financial Services Authority (FSA).
The ABSXchange platform is linked to offerings from one of FIRMS’ other business offerings: Valuation Scenario Services, which is globally headed by Peter Jones. The Valuation Scenario Services business is currently rolling out increased functionality on the ABSXchange platform to enable clients to carry out portfolio scenario and stress testing themselves.