Markit introduces European ABS pricing service

Source: Markit Group Limited

Markit Group Limited (Markit), the leading industry source for independent mark-to-market pricing and asset valuations, today announced it has launched an independent pricing service for European asset-backed securities (ABS).

The service provides same day bid/offer prices, and the spreads and average life assumptions on more than 3,500 European ABS. The coverage includes European Residential Mortgage-Backed Securities (RMBS), Commercial Mortgage-Backed Securities (CMBS), Asset-Backed Securities (ABS), and cash Collateralised Debt Obligations (CDO).

Backed by the leading market makers in European ABS, Markit's pricing service will allow the market to track ABS values using independent, consensus pricing. The service receives daily mark-to-market pricing inputs from all the major dealers, which Markit cleans and validates prior to price dissemination.

Dealers have the ability to make prices privately available, and to permission specific clients to see those prices. The website is also designed to receive requests from buy-side users for pricing on a security from a particular institution.

Ron Miao, Head of ABS Trading at Citigroup Global Markets commented, "Markit's pricing service for European ABS is a welcome initiative as it addresses the current lack of price transparency in secondary markets. The service will be further welcomed by the repo community as the lack of available third party-quoted markets has been a major hindrance to the growth of the repo market."

Rob Ford, Director & Head of European ABS Trading at Barclays Capital said, "Alongside the remarkable growth in European ABS markets in recent years, we have seen a reciprocal demand for regular revaluation prices from investors, which has generated a considerable time and money-consuming process for both them and us. Markit's new independent daily pricing service should help to speed-up this process, easing the burden on both investors and investment banks."

Kevin Gould, Executive Vice President of Markit and Head of Data Products and Analytics said, "We have provided our clients with a much-needed, transparent tool for valuing securities in the relatively opaque world of European ABS. Markit's new pricing service frees market participants from the need to call numerous dealers in order to establish a price on asset-backs."

Markit expects to extend its ABS pricing service into the U.S. arena next year, a market that is significantly deeper and more liquid than its European counterpart.

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