S&P Valuation and Risk Strategies to Provide Odd Lot Pricing for Taxable Fixed Income Securities

New York - 13 July 2010

Independent Odd Lot Evaluations are Now Offered for Corporates and U.S. Structured Finance Instruments

S&P Valuation and Risk Strategies, an independent and analytically separate business unit within Standard & Poor’s that provides users with market intelligence and analytic insight for risk-driven investment analysis, has expanded its odd lot securities evaluations capabilities beyond municipal bonds to provide odd lot pricing for U.S. corporate bonds and U.S. structured finance instruments.

Designed to give retail market participants a perspective on the current value of their fixed income holdings, the new odd lot pricing service uses the size of a holding as an input in determining bond valuations. In today’s marketplace, this perspective into the elemental components of retail based securities valuation is useful in helping market participants maintain a balance between mark-to-market pricing for institutional lot size trades and other market pressures that can impact the valuation process for retail holders.

Values are calculated using a formula that adjusts dollar values based on lot size, current institutional price and the maturity of the underlying security. Corporate bonds and U.S. structured finance instruments are pegged to a twenty-five bond lot for the calculation of an odd lot price.

“We have developed a method of evaluating odd lot fixed income securities that we believe uses the same techniques that a retail participant would,” said Frank Dos Santos, Vice President, S&P Valuation and Risk Strategies. “This level of transparency between buy-side and sell-side is useful for investors to get an understanding of their fixed income valuations.”

Initially disseminated to Valuation and Risk Strategies customers through a data feed, the odd lot pricing data will soon be incorporated into a Web-based solution that allows users access to current and historical data through a search engine or one-by-one lookup. Future expansion of the odd lot pricing service is expected to include certificates of deposit and European non-structured and structured finance.

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