LONDON -- Mark-it Partners Ltd. ("Mark-it") today announced that it has developed the first integrated daily pricing service for global credit derivatives and cash credit instruments and the company is now making this service available for use by the wider market. Mark-it has achieved this by securing agreement with 11 of the world's largest global credit trading institutions to provide their credit data on a daily basis and allow confidential redistribution of this data.
The launch of the system helps overcome one of the obstacles to the growth of the multi-trillion dollar global credit markets by enabling institutions to gain better insight into an opaque market and to improve their ability to manage risk and verify asset prices. The development of Mark-it's daily credit pricing system presents a significant opportunity to many market participants as it creates more robust and accurate closing credit market data. For the first time, institutions of all sizes can enjoy the benefits of receiving independent daily pricing data on the broadest range of credits. A larger number of institutions will now be able to access the market, better equipped to make trading decisions and ultimately manage and monitor their credit risk.
Where existing credit market data is only available on a limited number of credits for credit derivative products* such as credit default swaps, Mark-it provides accurate, regular, comprehensive and easily accessible information on both cash and derivative credit instruments. The applications offered by Mark-it have taken over two years to develop, use XML and Oracle technology and are accessed with a secure connection over the web.
At a time when The Basel II Accord - regarded as the basis for future global bank regulation - is calling for greater transparency and accuracy in the credit markets, Mark-it has secured agreement from its Partners to pool selected daily and historical credit data in order to help improve this transparency. These contributing partners (listed below) are helping to ensure that the Company's services continue to evolve to reflect changing market conditions and the banks' requirements. The Company was founded and is run by former executives of TD Securities, who have also provided the backing for the project.
Mark-it Contributing Partners
-ABN AMRO,Bank of America,Salomon Smith Barney,Credit Suisse First Boston, Deutsche Bank, Dresdner Kleinwort Wasserstein,Goldman Sachs, Lehman Brothers, Merrill Lynch,Morgan Stanley, TD Securities
Mark-it's technology platform enables each of the contributing partners to securely feed their credit data across all instruments into Mark-it systems overnight. The data is pooled and then cleaned using mathematical and logical cleaning algorithms to ensure its quality and integrity.
In addition to independent price verification, Mark-it provides a number of additional benefits to participant institutions, including:
- Improved capital modelling
- Accurate data for front office applications
- A tool to improve risk management surrounding entity naming
- Data for use in loan portfolio pricing and optimisation
Lance Uggla, Chief Executive of Mark-it Partners, said: "The credit markets have grown exponentially over the past few years, yet recent record bond defaults and corporate collapses have increased pressure to obtain up-to-date, high quality market data. At present, most credit market participants are struggling to achieve daily price verification on all but the most liquid of assets and this is hindering the growth of the market. Mark-it is now in a position to help solve this problem."
"Our knowledge of the credit market, combined with an acute understanding of the real need for this transparency, has led to the creation of Mark-it Partners. We believe that market participants, external auditors and regulators will warmly welcome the independence, accuracy and added value of Mark-it data."
"Our objective is to capitalise on our first mover advantage by continuing to develop our product. Ultimately, we believe that Mark-it will become the definitive source of credit pricing data in the financial markets."
Mark-it Partners provides the following four main services to registered users:
Mark-it Dataâ¢ provides an accurate database of daily closing prices and spread for international investment grade credit default swaps and debt securities. For each default swap and security the pooled data is used to generate a composite price and spread.
Mark-it Curvesâ¢ are produced from the data to create a graph and a best-fit Libor spread curve for each credit. The large volume of data input makes these graphs the most accurate representation of the credit market.
Mark-it Checkâ¢ is a daily price discrepancy service for credit portfolios to compare customer prices with the same instrument traded elsewhere. For illiquid or difficult to price instruments, the services will compare the customer's price to the price derived from the relevant credit curve.
Mark-it Mappingsâ¢ facilitates online mapping of a customerâs obligor names to Mark-it Partners' clean database. It is possible to compare mappings for all Partners and therefore significantly reduce risk through the early highlighting of error.
For further information, please contact: Mark-it Partners
Chief Executive Officer
Tel: +44 (0) 1727 734 201
Chief Operating Officer
Tel: +44 (0) 1727 734 207