LSTA and S&P launch pilot program to give loans CUSIPs

By Sara Rosenberg

New York, May 6 - The Loan Syndications and Trading Association and Standard & Poor's launched a pilot program to give CUSIP numbers to syndicated loans.

Eight financial institutions - Bank of America, Bank One, CIBC, Citigroup, Credit Suisse First Boston, Deutsche Bank and JPMorgan - will be involved in the preliminary testing of the program. The pilot is anticipated to continue for nine months after which a formal launch of the program is expected.

"The LSTA is delighted to be leading the effort to adopt unique identifiers for syndicated loans, as this is a seminal event for the loan market," said Allison Taylor, executive director of the LSTA, in a news release. "The advent of CUSIPs on loans heralds a host of critical improvements for all market participants, including the creation of a common reference for research, pricing and other analytical tools."

A web-based application form includes custom features such as an expedited application process for "Registered Agents", agent discretion to have numbers assigned on an "Unlisted" basis, a requirement that all investor-requested numbers be "Unlisted" and Registered Agent verification of investor requests for assignment of CUSIP numbers, according to the press release.

Some of the benefits cited from using a CUSIP system are:

* Precise exchange of information for drawdowns, repayments and fundings;

* Improved reconciliation for inquiries and investigations;

* Improved communication of information to national banking regulators for Shared National Credit reviews;

* Ease in utilizing internet trading and settlement platforms to exchange trade information and documents;

* Increased efficiencies and improved settlement times for secondary assignments of loans;

* Improved communication between front/middle/back office and counterparties about traded assets;

* Enhanced reporting capabilities for settlement process;

* Updated mark to market valuation information and ultimately automated feed of that information; and

* Assistance in providing automated feeds for updating ratings assigned by credit rating agencies.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.