Mizuho International plc has successfully gone live with Anvil’s new ARTS Agency Lending module. Mizuho already use ARTS for their Repo and Securities Finance desks and asked Anvil Software to extend the functionality to support their expanding Agency Lending programme.
Mizuho started agent lending on the fixed income portfolios of some major Japanese clients in August 2002. It is a new product line for the Mizuho Financial Group, with the full commitment and resources of the organisation and represents a major investment for the group worldwide. The strategy of the group is to market this product aggressively to the trust and custody clients of the Mizuho Financial Group.
ARTS Agency Lending has been developed to ensure lenders have the maximum flexibility to structure their client lending programmes to ensure long-term repeatable profits. ARTS caters for client lending whether on a true Agency basis or on a principle 'wash through basis'. Client lending can also be set up as a sole business function or in conjunction with principal repo and securities finance activities of a firm.
ARTS supports a structure that assumes the Agency Lender has a number of Clients and each client has a number of accounts. Some Agency Lenders will have a one-to-one relationship between Clients and Client Accounts; others will have a one-to-many relationship; and for others still the Client Accounts themselves may be distinct legal entities
Agency Lending from Anvil provides:
· Limit checking: Checks are made for current and forward-dated loans against gross limits and counterparty (borrower) lending limits, all on a real-time basis.
· Real-time Fair Allocation: Real-time Fair Allocation suggestions are given based on current lending activity, to ensure all Client Accounts are being treated equally
· Lendable stock finder: This ingenious search facility from Anvil means you can perform what-if scenarios, checking on Fair Allocation. You can also find out how much is lendable within a Client Account’s limits and also what is lendable to satisfy counterparty’s borrowing requirements.
· Re-investment: All standard re-investment (general collateral repo, tri-party, banks loans) are catered for by ARTS ‘ highly regarded trading capabilities.
· Group Trades: Where a chain of trades exists effectively representing one trade, a single action can be performed e.g. substitution, re-price, and all trades are updated.
Declan Monaghan, Manager of Agent Lending Trading at Mizuho says,"The Lendable Stock Finder is a very neat tool for matching available supply with eligible borrowers in a fully controlled environment. It allows us to check limits and fair allocations real-time, and is quick and easy to use. The next step for us is to add further custody functionality to ARTS."
Malcolm Clark, Director and Strategist an Anvil comments, "ARTS Securities Finance has already been a great success for Anvil, with three new clients since its launch in April 2002. The inherent flexibility and outstanding functionality of ARTS makes it ideally suited for the expanding Agency Lending market. We are delighted to have our first client and there has been a lot more interest in the product. "
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