Standard & Poor’s has launched a new business line aimed at helping investors perform due diligence on the financial instruments in their portfolios, including enhanced analytics and context around asset pricing. The new business, which has been dubbed Fixed Income Risk Management Services (Firms), combines several previously separate business and product lines under a unified mandate, says the vendor.
Lou Eccleston, executive managing director of the new business line at Standard & Poor’s, explains the rationale behind the move: “For both investors and regulators, transparency has come to mean not just more data, but also greater analytics and insight around the financial instruments in exceedingly complex portfolios. The mission of Firms is to bring greater commercial analytics capabilities to the marketplace, not just in response to market demand, but also to support the many methodological and transparency enhancements we’ve been making on a company-wide basis to advance the understanding and use of credit research.”
Standard & Poor’s claims that this new business line is part of its commitment to providing analytic transparency and independent and objective analysis of asset backed securities, corporate credits and credit derivatives.
The new services encompassed by Firms include qualitative and quantitative market research and commentary. This research will be carried out by an independent internal research group, which the vendor says is focused on helping investors better understand the cross-market and cross-asset class valuations and relationships in complex structured products. Its Market Intellect research reports use its proprietary, third party and new models and analytics with a view to improving investor level transparency, says S&P.
Credit ratings information, data distribution and insight is also part of the new offering and this can be delivered to credit professionals through RatingsDirect, S&P’s credit analysis portal, and through real-time technologies and publications, including RatingXpress, RatingsIQuery and CreditWeek. Firms also includes real-time coverage of the leveraged loan primary and secondary markets. S&P says this provides large leveraged loan underwriters and investors with an analytically robust database and research reports including the flagship “Standard & Poor’s LCD News”.
With a view to allowing firms to identify global linkages and enable granular risk management, the new business line encompasses company cross-tagging of global identifiers, reference data, counterparties and securities. Credit risk models and solutions designed to enhance clients’ internal credit rating systems and provide tools for their credit portfolio analysis are also included in the new business line. These models and solutions incorporate the analysis of probability of default, loss given default, and exposure at default.
Firms customers have the option to select structured finance models, analytics and solutions offering underlying data, quantitative models and advisory services to the structured finance community. This includes ABSXchange, an internet portal providing investors with structured finance deal performance data, portfolio monitoring and surveillance, cash flow analysis, and reporting.
They can also opt for independent securities evaluations for cash fixed income and structured finance instruments offering, through S&P’s Securities Evaluations, independent price evaluations of hard to price fixed income and structured securities daily, and fixed income reference data.
According to the vendor, the analytic services and products provided by the new business line are the result of separate activities designed to preserve the independence and objectivity of each analytic process.