Euroclear Bank will be the first international central securities depository to offer automated, multi-currency post-trade services for syndicated loans in Europe.
Following the Loan Market Association’s call in January for greater processing standardisation, Euroclear Bank will start to roll out its service early in the third quarter of 2008, ultimately providing nine core service features for syndicated loans.
In the first instance, clients involved in syndicated loans will benefit from three features:
” the assignment of unique loan identification codes;
” a centralised database containing static and dynamic loan information, at commitment, contract and letter of credit level; and
” consolidated reporting of lender balances via secure, automated, electronic communication.
Clients will commence testing at the end of April.
“The growth and maturity of syndicated loans as an established asset class has prompted the need for a neutral, market-owned processing solution. We are responding to the Loan Market Association’s request for greater post-trade efficiency and automation in the European syndicated loan market. By leveraging our resilient systems and multi-jurisdictional transaction-processing expertise, used for a wide range of asset classes, we are well placed to deliver a complementary service,” says Ignace R. Combes, deputy CEO, Euroclear SA/NV.
Euroclear Bank is currently in the process of defining additional service requirements for pilot testing with selected clients in the second half of 2008 to cover:
” portfolio reconciliation;
” agent notices (in cooperation with SWIFT); and
” automated trade/legal confirmation matching.
Subsequently, Euroclear Bank will continue market dialogue to offer a complete set of syndicated loan services including:
” automated “delivery versus payment” settlement services for primary and secondary loan trades;
” loan interest calculation and payments; and
” collateral management services.