The Depository Trust & Clearing Corporation (DTCC) and Clearstream are partnering to offer services for the bilateral loan and syndicated loan markets.
Clearstream will begin offering DTCCs Loan/SERV Reconciliation Service in the first half of 2012. The two organizations also will develop bilateral loan services built on Loan/SERV and integrated with Clearstreams collateral management platform.
DTCCs Loan/SERV Reconciliation Service automates the reconciliation process and enables agent banks and lenders to view and reconcile syndicated loans on a daily basis. The Loan/SERV Reconciliation Service will be offered to clients in EMEA and Asia, but not the DTCCs home market of the United States.
The Loan/SERV Reconciliation Service will also support the processing of European bilateral loans in early 2012.
Loan/SERVs bilateral loan module will be integrated with Clearstreams collateral management platform, enabling Clearstream clients to mobilize their bilateral loan portfolios as collateral with their respective national central banks, and will extend the potential types of assets to be used as collateral in interbank tri-party transactions, according to the recommendation of the ICMA European Repo Council (ERC).
The partnership differs in scope from the one Clearstream recently announced with the Australian Securities Exchange (ASX). Clearstream and ASX are developing a collateral management service for the Australian market that directly links to clearinghouses CHESS and Austraclear and helps market participants manage bilateral and central counterparty risk exposures with non-cash collateral and short-term funding requirements.
We are pleased to partner with Clearstream on this initiative,” says Michael C. Bodson, COO of DTCC. “The strategic partnership will benefit the customers of both DTCC and Clearstream by bringing together highly complementary strengths and services in loans and collateral management respectively, as well as help expand existing loan services in Europe and elsewhere.
Jeffrey Tessler, CEO of Clearstream, adds: We are pleased to cover a new asset class with our services and create a new market infrastructure for loans. We are looking forward to partnering with DTCC and to be able to draw on DTCCs experience of the syndicated loan market. Our goal is to improve the existing syndicated loan service for bilateral loans and enhance it with our collateral management capabilities.
(CG)