Jersey City, New Jersey, November 20, 2003 - Principia Partners LLC, a leading provider of full front-to-back office systems for global capital markets, today announced that the Federal Home Loan Banks (FHLBanks) Office of Finance has licensed the Principia System to support fixed income analytics. The system is scheduled to go live by the end of 2003.
The Office of Finance is the debt issuing facility for the US-wide network of FHLBanks, liaising with securities dealers to fund FHLBank activities. Principia offers the facility a sophisticated debt analysis solution, with the powerful analytics necessary to support deal capture, pricing and risk measurement and relative value analysis for a wide variety of agency bonds and derivatives. Using Principia's valuation platform, the Office of Finance will be able to provide the FHLBanks with consistent and timely data comparing various debt structures, as well as a historical database. A number of the regional FHLBanks are currently using the system to manage their fixed income and derivatives business processing.
Debbie Cohen, Senior Director Planning and Research, FHLBanks Office of Finance, comments: "The FHLBank System has worked with Principia Partners since 1996, when several of the regional Banks implemented the Principia System for financial modeling, derivatives valuation, market risk and credit risk management. We wish to provide a common valuation engine and Principia was an obvious choice."
The Principia System offers advanced modeling and pricing capabilities, which greatly enhance the accuracy of pricing by incorporating subtleties such as LIBOR basis, cross-currency basis, and supply/demand skewing of volatilities.
The system's risk management tools are comprehensive, allowing users to calculate and monitor risk both on individual transactions and across entire portfolios. Valuations are performed using consistent methodologies on a common platform to preserve integrity throughout the entire trade lifecycle, from trade inception through to regulatory reporting and FAS-compliant accounting.
"We are delighted that the Office of Finance has selected us to provide a common analytic platform for the FHLBanks, further strengthening the longstanding business relationship we share with the FHLBank system," states
David Boldon, Global Head of Sales at Principia Partners. "We are committed to providing innovative and adaptive solutions to this important market sector."
The FHLBanks have over 70 years of innovation and service to the U.S. housing market, and currently have over 8,000 members in all 50 states, American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands.