LSTA and S&P to provide Cusip Isin numbers for syndicated loans
13 October 2004 | 1136 views | 0
Source: Standard & Poor's
A new service has been launched by the Loan Syndications and Trading Association (LSTA), the trade association for corporate lending and loan trading, and Standard & Poor’s, operator of the CUSIP Service Bureau and a leading provider of independent research, indices and ratings.
It will provide CUSIP and CUSIP-based ISIN numbers along with core descriptive data for syndicated loan deals and facilities. The new Syndicated Loan Service is the result of the LSTA’s and Standard & Poor’s collaborative efforts to design special applications to accommodate the unique features of syndicated loans.
Using the CUSIP system, the Syndicated Loan Service establishes a common numbering system to reference syndicated loans in the corporate loan market. The use of CUSIP numbers as a unique common identifier facilitates proper crediting of money movements, creates a common reference for market pricing and enables a more orderly exchange of information in an automated environment.
"The addition of the syndicated loan asset-class to the CUSIP system will help bring about transactional efficiencies in the syndicated lending and loan trading markets and thus adds significant value to the financial markets," says Maria Latorraca, product director for the CUSIP Service Bureau.
"We believe that our joint effort with Standard & Poor’s to implement the use of unique identifiers will create greater market efficiencies and spur the continued growth and increased volume of the syndicated loan market," adds Jane Summers, general counsel of the LSTA. "There will now be a common reference for research, pricing and other analytical tools, enabling an increase in liquidity in this rapidly growing market."
Since the syndication and trading of loans can often be conducted on the basis of non-public information, the assignment, maintenance and dissemination of loan CUSIPs required some adjustment from the way CUSIPs are currently used for securities and other public financial instruments.
This initial release contains approximately 2000 CUSIP numbers for deals and facilities. The subscription service contains daily additions and changes to deals as released by the administrative agents. Currently, 21 administrative agents covering 80 percent of the corporate loan market apply for CUSIP numbers using a specialized version of the CUSIP Request on-line system. From its inception in 1999, the project has been guided by eight financial institutions, which also took part in a pilot test.
The eight financial institutions are: Bank of America, Bank One (now part of JP Morgan Chase), CIBC, Citigroup, Credit Suisse First Boston, Deutsche Bank, FleetBoston Financial (now part of Bank of America Securities) and JP Morgan Chase.