Standard & Poor's, the leading provider of financial market intelligence, has announced the launch of Valuation Scenario Services for Structured Asset Portfolios, a new service to help investors evaluate the intrinsic value of structured assets and complex securities.
The new service is provided by Standard & Poor's Fixed Income Risk Management Services (FIRMS) business, which offers a range of analytics that give investors greater context around asset pricing and the detailed relationships between counterparties and obligors. FIRMS is already working with a number of central banks, regulatory and industry bodies, as well as investors, to help them value complex and illiquid securities. The Valuation Scenario Services launch announcement was made at a conference in New York to unveil Standard & Poor's new Ratings Direct credit portal.
With an estimated $4 trillion in structured assets held in investor portfolios, the ability to conduct systemic valuation analyses that are well-defined and methodologically consistent across all assets fulfills a critical need in the current market. The analytics provided by Standard & Poor's Valuation Scenario Services offer investors a step-by-step, transparent assessment of their structured portfolios under a range of different assumptions and economic scenarios. This information is then reviewed in a collaborative decision support process with clients to help drive an improved understanding of structured credit portfolio value. Standard & Poor's Valuation Scenario Services operates independently from the company's ratings business.
"Market uncertainty, a lack of liquidity and an overall crisis sentiment are combining to create a disrupted relationship between market-observed pricing and the intrinsic value of structured assets on investors' balance sheets," said Lou Eccleston, Executive Managing Director, Fixed Income Risk Management Services, Standard & Poor's. "Our Valuation Scenario Services help investors analyze their portfolios against a multitude of potential economic scenarios to get a much clearer picture of the real value of the paper they are holding."
Standard & Poor's Valuation Scenario Services are supported by the Market, Credit and Risk Strategies team, a newly formed, independent research group that analyzes cross-market and cross-asset class valuations and relationships; the Standard & Poor's Structured Finance Platform and modeling team; and the Fixed Income Architects team. Together, this group of structured finance experts and industry-leading analytics tools are helping to bring greater transparency to structured portfolios.
Analytic services and products provided by Standard & Poor's FIRMS are the result of separate activities designed to preserve the independence and objectivity of each analytic process. Standard & Poor's has established policies and procedures to maintain the confidentiality of non-public information received during each analytic process.