Thomson Reuters will utilize Lewtan Technologies ABSNet cashflow library to expand its Valuation Risk Service. This will give Thomson Reuters clients additional coverage of structured finance instruments in Europe in order to help strengthen transparency and develop better evaluated prices in the marketplace in light of the current financial crisis.
Lewtan Technologies, Inc. is the provider of ABSNet, the source for asset-backed securities surveillance data, analytics, software, and content for the securitisation industry. Thomson Reuters is utilising Lewtan’s ABSNet Cashflow library to provide model support in conjunction with observable price data for the broadest European MBS coverage.
Market dislocation in global ABS/MBS/CMBS bond prices has required investors to acquire additional data on both the evaluated prices themselves and underlying credit performance. Lewtan provides both deal models to form independent pricing valuations as well as underlying credit performance data on both the bonds and the collateral supporting these transactions.
“The selection of our ABSNet library by Thomson Reuters is another example of Lewtan’s commitment to increasing transparency in the structured finance market,” says Ned Myers, chief marketing officer, Lewtan.
“Market transparency of prices and challenges with the mark-to-market model are on the forefront. With the structured finance community left to continue pricing most bonds on a Level 3 basis under FAS157, investors have had to interpret wide fluctuations in derivatives market prices, internal valuation models, and third-party valuations to determine the value of their portfolios. The combination of ABSNet’s data and deal models with Thomson Reuters pricing expertise will provide more credible prices when a mark-to-model price is required.”
“The opaque nature of the world’s structured finance markets has driven demand for robust, independent, evaluated prices,” says Karl Mackelburg, global head, Structured Finance and Derivative Pricing, Thomson Reuters. “Working with Lewtan supports Thomson Reuters goal of incorporating external market expertise to provide greater coverage and accuracy, especially on difficult to value assets.”
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