Interactive Data to Provide Valuations of Complex Structured Products Through Exclusive Agreement with Prism Valuation

16 September 2008

Interactive Data Corporation (NYSE: IDC), a leading provider of financial market data, analytics and related services, today announced an exclusive agreement between its Pricing and Reference Data business and Prism Valuation. Under the agreement, Interactive Data Pricing and Reference Data will now have the capability to provide valuations of highly complex OTC derivatives and structured products as part of its wide-ranging pricing and evaluation services.

Prism Valuation, which was founded in 2006 and maintains offices in London, Melbourne and Toronto, provides valuations of complex OTC derivatives and structured products based on a wide range of underlyings including: interest rates, FX, inflation, equities, credit, commodities and hybrids. Interactive Data’s clients will be able to request valuations on a per instrument basis, which will be calculated by Prism Valuation’s quantitative analysis team and then delivered via FTSSM, Interactive Data’s securities administration tool. Interactive Data already has clients who are subscribing to these valuations.

The Prism Valuation team emulates the valuation processes of a typical structured products dealer by synthesizing the most important components required for valuation and analysis: up-to-date market data, appropriate valuation models and targeted calibration strategies. The service that Interactive Data will offer includes valuation transparency reports that provide a breakdown of the method to achieve a given valuation for each deal, including a detailed discussion of the models and calibration strategies selected. This level of transparency can help clients comply with current regulatory and auditing demands.

Prism Valuation has a core team with many years of direct front office and quantitative experience at structured products dealers. In addition, Prism Valuation’s strategic partnerships include ICAP, the world’s premier interdealer broker, which provides underlying market data, and NumeriX, one of the foremost global providers of cross asset pricing and risk analytics for exotic derivatives and structured products. Prism Valuation’s market experience and important strategic relationships enable valuations of derivatives and structured products across multiple asset classes.

As part of this strategic alliance, Interactive Data has purchased a minority ownership stake in Prism. Financial terms of the investment were not disclosed.

Greg Cripps, president and CEO, Prism Valuation, said, “We are delighted to enter this relationship with Interactive Data, which has many years of experience in evaluated pricing, and extensive global distribution channels. We look forward to offering our independent valuation services of complex products via Interactive Data, and delivering valuations and risk analysis transparency to help customers further adapt to an increasingly regulated global business environment.”

Roger Sargeant, managing director, Interactive Data (Europe) Ltd, added, “Financial institutions continue investing in new, ever more complex financial instruments in order to help achieve portfolio diversification, hedge risk, optimize performance and drive growth. As part of our ongoing strategy to address our customers’ evolving needs, we continue to expand the breadth and depth of our coverage by adding pricing and valuations of more complex, esoteric structured products. Given the current credit and trading conditions, our relationship with Prism Valuation will help customers meet their mark-to-market pricing obligations as well as the demands of credit and risk management, and portfolio management.”

Interactive Data, through its Pricing and Reference Data business, is a leading independent provider of daily evaluations for fixed income securities. With over 30 years of experience, Interactive Data’s teams of evaluators operating in three major time zones evaluate approximately 2.5 million fixed income issues every day. Over 5,000 financial institutions worldwide, ranging from central banks to large investment banks, subscribe to Interactive Data’s bond evaluations.

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