Interactive Data Corporation (NYSE: IDC), a leading provider of financial market data, analytics and related services, today announced that its Pricing and Reference Data business has introduced a service that will automate the delivery of independent valuations of interest rate swaps.
With the new interest rate swap valuation service, Interactive Data can help customers more efficiently value portfolios that contain a broad range of financial instruments, including securities and over-the-counter (OTC) derivatives.
According to the International Swaps and Derivates Association (ISDA), interest rate swaps represent a significant portion of the OTC derivatives market, with a total notional amount outstanding of $250.8 trillion (as of June 30, 2006). The growth of interest rate swaps, up 25% over the previous year, has been driven by a number of factors, including the standardized contract documentation from ISDA, growth in electronic trading (single and multi-dealer platforms, as well as ECNs), and availability of automated matching and confirmation services from the Depository Trust and Clearing Corporation (DTCC).
Interactive Data's new service delivers valuations of interest rate swaps based on benchmark curves from ICAP, the world's premier interdealer broker, and trade details input by customers. The valuation process leverages Interactive Data's technical infrastructure and is supported by the Company's business continuity processes and redundant systems.
The interest rate swap valuation service is available as a module to FTS(SM), Interactive Data's online portfolio administration service. FTS includes user-friendly setup screens and reports that include the results of file uploads, and offers customers the ability to upload trades and download output files.
Interactive Data's new service will generate two valuations each day: based on curves at the end of the day in London (16:30 GMT) and at the end of the day in New York (16:30 ET). Customers can choose which valuation they would like to receive, or both, depending on their needs. Interactive Data will continue to work closely with customers to understand their requirements, and will expand the new offering based on this input.
"By leveraging our experience in bond bon bond evaluations, we have developed a new offering that can help customers seamlessly obtain independent valuations of interest rate swaps - a large, well-established market that is still experiencing significant growth," said Ray D'Arcy, president of sales, marketing and institutional business development, Interactive Data Corporation. "The new interest rate swap valuation service complements our current offerings that deliver independent valuations of credit default swaps, CDS index trades and bank loans, demonstrating our commitment to expanding the range of information that we deliver to customers through flexible offerings that tightly integrate into their workflow."