Press Release
Principia standardizes integration, ongoing surveillance and management of collateral performance data
Principia SFP eases processing and analysis of performance data as regulators mandate institutions to know and understand their structured finance investments
New York, NY October 27, 2009 - Principia Partners, the leading solution provider for the management and administration of structured finance portfolios, today announced the launch of Principia Structured Finance Platform (Principia SFP) Version 6.2. The latest upgrade helps financial institutions and investment managers to track, monitor, analyze and report on the collateral pool performance of any fixed income asset, including ABS, RMBS, CMBS, CDOs, CLOs and Covered Bonds. It provides a standardized, end-to-end operational infrastructure to normalize and more efficiently manage ongoing collateral performance data, regardless of the asset class or data source.
A new standard interface into Principia SFP resolves the challenges and inefficiencies associated with integrating performance and cash-flow data into the ongoing management and oversight of structured finance portfolios. The system automates the processing of external data from any independent performance data provider (e.g. Intex, Lewtan, Markit, Bloomberg, Trepp, Moodys, S&P etc.) or bond trustee, as well as proprietary data resulting from the internal credit analysis of loan-by-loan information. Data for multiple deals, from disparate data sources, is integrated on a single platform to display accurate and consistent performance metrics on-demand, across the business. Organizations can manage and maintain compliance with risk limits, perform rigorous stress tests and deliver timely reports detailing performance measures at the portfolio, deal, tranche or collateral level.
The need to unify the control, management and risk surveillance of structured finance operations is increasingly being highlighted by the industry. Recommendations by working groups and industry bodies have helped to shape regulatory proposals such as the new Basel II Securitization Framework, as well as the conditions for participation in US and UK government initiatives such as the US Term Asset-Backed Securities Loan Facility (TALF) and Public Private Investment Program (PPIP). It is no longer acceptable to manage structured finance assets without the sufficient controls and operations in place to support sophisticated portfolio management.
The Basel II Framework Enhancements state that in order to qualify for the new risk weightings, institutions: Must be able to access performance information on the underlying pools on an ongoing basis, in a timely manner. Such information may include, as appropriate: Exposure type; percentage of loans 30, 60 and 90 days past due; default rates; prepayment rates; loans in foreclosure
With Principia SFP Version 6.2, portfolio managers, risk analysts and compliance staff have the flexibility to choose from over 350 pre-defined performance measures to slice and dice fixed income and structured credit portfolios. This includes the ability to monitor, analyze and report on loan-to-value ratios and cumulative deal level losses; to stress test default, recovery and prepayment rates; and the ability to view collateral pool delinquency rates (e.g. 30, 60 or 90 days), across any stratification of that pool. Clients can also add unique performance measures, as demanded by the requirements of their business.
We are seeing a growing demand from financial institutions and investment managers looking to reduce the inefficiencies and risks associated with managing and integrating multiple databases and data sources for different structured finance deals, said Douglas Long, EVP business strategy, Principia Partners. Policy makers are making sure that organizations with long term investment goals involving securitized assets have a robust operational framework in place to really understand their investments on an ongoing basis. Thats not possible on spreadsheets and systems that arent developed specifically to adapt to the dynamic requirements of structured finance.
The Financial Stability Board, advisors to the G20, reiterated the importance of the Basel II Framework Enhancements to supervisors and regulators last month. Their address also highlighted the International Organization of Securities Exchange Commissions recommendations on how to better inform and protect investors by: Including initial and ongoing information about underlying asset pool performance.
Principia SFP V6.2 is available immediately and can be provided as a stand-alone system or as an upgrade for existing Principia SFP users.
About Principia Partners
Principia Partners LLC (Principia) provides a comprehensive single platform solution for the end-to-end management of structured finance investments. Global financial institutions and independent asset managers have used the award winning Principia Structured Finance Platform since 1995 to unify investment analysis, portfolio management, risk surveillance, accounting and operational control across the breadth of structured credit assets, fixed income investments and complex derivatives.
For over 15 years Principia’s mission has been to help investors independently address the deal specific investment and cashflow analysis, valuation, risk management, reporting and due diligence requirements of structured credit investments and portfolios. Its dedicated support and continued development of functionality for structured finance instruments is accompanied by a proven and fully integrated derivative valuation framework. This overall credit investment and market risk solution delivers the robust backbone necessary for deeper investment analysis, proactive risk surveillance and operational control across the credit investment business.
Principia is based in New York, with an office in London and a technology center in Conshohocken, Pennsylvania. Principia SFP was awarded the Credit Technology Innovation award by Credit magazine in 2008, 2009 and 2010.
For press information contact:
Ben Jarrold
Tel: + 44 (0) 20 7618 1370
Email: Jarrold@ppllc.com