Markit launches Present Value service for credit derivative portfolios
Markit has launched a Present Value ("PV") Service to provide a swift and accurate Net Asset Value ("NAV") of credit derivative portfolios.
Markit is the industry source for independent pricing and valuations. The PV Service is designed to provide hedge funds, traditional asset managers and fund administrators with a fully automated service, offered over a secure website connection. Users can submit trade data at any time, either from a spreadsheet or via XML, with no additional software required to use the service.
Trades are priced using Markit's clean, average mark-to-market prices taken from the main dealers in the credit default swap ("CDS") market, and an independent valuation is supplied back to the user within seconds. CDS positions in the user portfolio are tagged with the market-standard RED (Reference Entity Database) codes.
The PV Service values a broad range of credit derivative products, including CDS and index trades. Bespoke synthetic CDO baskets and tranched index trades are expected to be included in the service in the second half of 2005.
David Hampson, Controller at Anchorage Capital, said: "Markit's PV Service lends a high degree of integrity to a valuations process required of all market participants, saving time and eliminating manual spreadsheet calculations which often lead to pricing errors."
Kevin Gould, Executive Vice President of Markit, commented: "The service is aimed at any institution that does not want to go to the expense of setting up internal valuation systems and then integrating external, independent data. Markit can now supply this service very simply, allowing a portfolio of trades to be valued, with our dataset, at the push of a button. The process is quick, easy and cheap."
Background Note: Markit is a source for asset valuation data and services supporting independent price verification and risk management in global financial and energy markets. Founded in 2001, the company is an independent enterprise with which the world's leading financial institutions and energy traders work strategically to create price transparency. Markit is sponsored by 13 financial institutions who manage assets in excess of USD 10 trillion, and data contribution relationships with over 45 dealing firms.
Markit has designed, launched and acquired over 20 financial data services which are now used by over 300 institutions globally. Areas of product expertise and service include an independent valuation perspective on credit default swaps, corporate bonds, syndicated loans, OTC derivatives (credit, equity, FX, rates, energy, power, metals and structured products), as well as dividend forecasting and index and ETF management.
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