Standard & Poor's and Portfolio Management Data LLC, a loan syndications data base and research firm, have agreed to jointly develop information products for the bank loan market.
S&P is expected to advance Portfolio Management Data close to $1 million in capital to speed the company's growth, sources said. Both firms declined to comment on the financial arrangements.
The move demonstrates the increasing importance of information in the bank loan market - for lenders who originate the loans as well as for brokers, investors, and traders on the secondary market.
"We continue to see that market, and the need for information in it, grow very rapidly," said William Chambers, a managing director in S&P's corporate ratings group. "Certainly, the rush of liquidity that hit the market in the last year and a half has spurred its tremendous growth, but we can see a need for more selectivity and the ability to distinguish between the kind of deals that are coming forward."
Anticipating an increase in problem loans as the current business cycle ages, the first product to be jointly developed will track the financial strength of companies through various stages before default.
The tracking product is expected to take at least a year to develop, said Steven Miller, principal of Portfolio Management Data.
Separately, Portfolio Management Data announced it has hired Babak Varzandeh, previously the market analyst at Loan Pricing Corp., to supervise its Leveraged Comps System, an interactive database of syndicated loans.
Portfolio Management Data was founded last year by Mr. Miller, formerly of Loan Pricing, and David Keisman, formerly with Chase Manhattan Corp.
S&P began rating syndicated loans in 1995. It has since rated more than 400, with a total value of more than $200 billion. u