Trade Settlement Launches Distressed Settlement Platform
February 23, 2010
Trade Settlement, a provider of electronic platforms and other settlement services for the primary and secondary loan markets, has launched a settlement platform for the distressed loan market that it says is the first of its kind.
The platform provides users and their agents the ability to prepare and sign distressed transfer documents online, including trade confirms, assignment agreements, purchase and sale agreements, and purchase price letters. Users can also manage and track loan inventories and related loan activity, which provides them an easier way to allocate trade inventory to open sales, TSI says. The platform works with a user’s other back-office systems, so users don’t have to enter data in twice. This will foster more accurate and timely cash and position reconciliations, the firm says.
“We have put in place a tremendous opportunity for market participants to improve the efficiency of post-trade processing of distressed loans,” Pat Loret de Mola, president of TSI, said in a statement. “The industry wants and urgently needs an automated settlement platform to help achieve business and operational goals. The new automation for distressed loans does just that while providing greater transparency and better tracking of settlements. This will lead to quicker completion of trade processing and lower transaction costs. And, we believe, the automated platform will help drive the future, healthy growth of the market.”
Distressed loan volume climbed to $140 billion last year, a 250% increase from 2008, and yet settlement times for distressed debt have not improved, TSI says. The average settlement time for distressed loans significantly lags settlement for par trades.
The platform has been piloted by several market participants over the past months. User feedback has been positive, TSI says.
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