Sollis, in strategic partnership with Structured Credit Investor (SCI), a news and data vendor in the fixed income markets, recently brought to market a new suite of data visualisation tools to allow SCI’s customers to better analyse trends and opportunities in the Asset Backed Securities (ABS) markets.
SCI’s challenge to Sollis was to unlock value in over a million data points being stored in traditional flat files and displayed as vast tables. SCI’s customers, including broker-dealers, hedge funds and institutional investors, use SCI’s market data to monitor new deal issuance, analyse trends over time, and to track activity in the secondary traded market for ABS securities. Analytical tools, allied with these new data visualisations, enable SCI’s customers to significantly increase the efficiency of their research.
Why is this important?
The ABS markets are opaque and highly detailed in nature. When a new ABS deal is issued to investors the underlying loan collateral is pooled based upon common characteristics of the debt obligors; it then possible to layer or tranche each pool of debt based upon these characteristics – essentially the common risk profiles of the individuals or companies paying interest on the loans they’ve taken out. These loans cover a wide variety of sectors, from corporate loans taken out by small-to-medium enterprises to build new infrastructure, to residential housing mortgages and student loans taken out by private individuals. Depending on the likely chance of these debts being paid off (‘serviced’) through standard monthly interest repayments, each tranche has a risk rating attached to it. in summary, the tranching exercise is called securitisation, and transforms the loans into bonds in order that they can be formally rated by credit ratings agencies and invested in by professional institutions.
Comparing issuance data by risk profile and by sector is important to understanding trends in the market over time and monitoring new deals as they are brought to market. The need to uncover trends is, however, broader still. As we set out previously, because each tranche’s risk profile has an independent rating attached to it investors are able to specialise in investing in bonds with specific ratings, adding additional complexity to investment research. Having a reliable and independent source of regularly updated market data that can be efficiently interrogated is therefore a big plus to many investors, especially given the increasing volume of data and regulations that they are now burdened with.
John Owen Waller, Managing Director of SCI commented: “Sollis has helped us to unlock significant value for our customers. Interrogating large sets of data is now quick and flexible and help analysts uncover market trends that were previously more time consuming and elaborate to analyse. We surveyed the market for a business information vendor extensively; Sollis’ experience and customer support in the data visualisation space has lived up to their promise and proven to be absolutely first rate.
Nigel Slone, Managing Director of Sollis commented: “The collaboration with SCI is another important step in the Sollis data visualisation and analytics journey. In an increasingly competitive climate it is those organisations and companies who can best leverage their data assets that will prosper. In the modern economy data may well be the new oil, but the real challenge is to deliver insight from that data. This was the SCI challenge to Sollis and it is these insights that will ultimately help our finance clients drive growth and profitability.
Uncover your market data
Sollis specialises in bringing extremely large sets of data to life. How are you allowing your employees and customers to access your proprietary financial market data? Whether it’s internal financial reporting, data analysis for researchers or customer data in dashboards and newsletter communications, you can now unlock significant stakeholder value in a quick and cost efficient way using Sollis’ open source data analytics.
SCI, founded in 2006, is a specialist publisher of news and analysis on all aspects of the structured credit and Asset Backed Securities (ABS) markets.
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