Markit Adds New Functionality for Syndicated Loan Settlement

Markit has added a new functionality in its electronic trade settlement service for syndicated loans. The addition is designed to streamline and speed up the trade settlement process of these loans.

With the new functionality buyers and sellers can now use Markit’s ClearPar online system in order to answer questions that affect variable clauses within an assignment agreement (A&A), a document required for transferring ownership of loan assets. Known in the industry as A&A questions, these are required by 31% of loan trades – up from 9.5% in 2009, according to estimates by Markit.

ClearPar automatically updates the assignment agreement based on the answers to A&A questions provided by parties to the trade.

Mindy Campbell, bank debt operations manager at T. Rowe Price, said: “A&A questions weren’t an issue just a couple of years ago, but have more recently started to introduce additional steps and delays into the settlement process due to the lack of a technology solution to incorporate them into the process. Markit has helped to address this issue, allowing us to more easily manage the questions directly in ClearPar for incorporation into the A&A.”