Principia Partners develops structured finance framework

Source: Principia Partners

Principia Partners LLC, a leading solutions provider to the structured finance industry, today announced a unified structured finance operating company (SFOC) framework that provides advanced end-to-end processing capabilities for multiple structured finance businesses, such as ABCP conduits, securities arbitrage conduits, structured investment vehicles (SIVs), credit derivatives vehicles and guaranteed investment contracts (GIC) issuers.

Principia is already the dominant solutions provider for SIVs, GIC issuers and credit derivatives vehicles – supporting 50% of those businesses covered by a rating agency under its methodology for rating structured financial operating companies.

Building on over ten years of domain expertise the framework addresses the demands in the industry for a unified platform that provides deal (portfolio, credit & liquidity) management in conjunction with automation of operationally intensive administrative tasks such as compliance reporting, accounting and maintaining an audited operating policy. Unlike many current market solutions that rely heavily on inefficient and error-prone spreadsheets, Principia's SFOC framework offers a common foundation that can flexibly meet the stringent requirements of managing a variety of structured finance businesses.

By virtue of its consistent end-to-end processing platform, the Principia System helps clients to reduce operational risks and costs stemming from unmanaged spreadsheet proliferation and maintenance of a multitude of disparate systems. As regulatory and compliance pressures intensify, the ability to provide detailed audit trails and deal transparency through managed operational processes is becoming increasingly important to these businesses.

"One of the main strengths of the Principia SFOC framework is its ability to impart significant time-to-value benefits across a wide spectrum of vehicles in this dynamic market" states Dr. Douglas Long, EVP – Business Strategy at Principia Partners. "For example, a security arbitrage conduit manager can easily and quickly adapt the system to utilize techniques from a SIV structure, in order to pursue economic or arbitrage opportunities. It can be a decisive competitive advantage in terms of both eliminating labor-intensive and non value-added activities as well as minimizing risk inherent in manual processes."

The Principia SFOC framework has three core components: a portfolio management layer with comprehensive position management and deal capture facilities; a cashflow and exposure analysis engine for managing market, credit and liquidity risks; and accounting/operations capabilities designed to produce statements and reports for regulatory compliance as well as internal and investor requirements.

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