One of the bigger risks banks have assumed—or in many cases, avoided—with syndicated loans in this credit environment is inter-party failure. Beginning next year, a new online corporate loan hub will launch—with key investments by Bank of America, Credit Suisse and Morgan Stanley—to help in automatic matching, settling and reconciling activities in syndication and secondary loan markets.
The Storm Loan Marketplace will be a platform for buy- and sell-side institutions participating in the corporate bank loan market, using real-time, agent bank data for issuance and secondary settlement. This data is used with toolsets for trade matching, primary and secondary trade settlement, inventory, position reconciliation, and credit documentation, according to Storm officials. “The platform is a real solution that takes the loan market a long way towards accomplishing the goal of fast and certain settlement by automating what was previously an inefficient manual process,” says Steve Ewald, principal, Global Markets Group at Bank of America.
Storm, created on a software platform of Quartet Financial Systems and hosted by Xand Corp., will be available in early 2009 for use in the U.S., London and other global markets.