Investors finally taking advantage of new data tools
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Investors finally taking advantage of new data tools

Investors are just beginning to analyze the individual loans backing their deals, a year and a half after the information became more available through the European DataWarehouse initiative.

Originators and securitizers have been required to provide data on newly registered transactions to be included in the data warehouse since June 2012. 

That information has made its way into workable performance models only recently though, data providers and analysts said during a panel discussion at the ABS Global conference in Barcelona on Tuesday.

“Investors are coming to expect loan-level data and they say they want it,” Phil Aldis, a managing director at Goldman Sachs said. “I think there is a question of what investors do with it though.”

Loan-level data is beginning to inform investors in a passive way, added Aldis. He said that is because third party data and analytics providers have started to include the data in their cash flow models.

“New doors are being opened for investors as new technologies have been developed on the reporting side,” James Ullrich, a senior manager at Deloitte & Touche, said. “Data visualization is pretty substantial and is now light years away from where it was even a few years ago.”

While data and analytics providers are using more loan-level data in their models, the information is not always uniform or complete. Moody’s analytics director Stephen Clarke said some issuers do not report prepayment dates for some loans, leaving investors to figure out why performance has dropped for some securities that see high prepayments for collateral.

Investors are expected to benefit from better data going forward, as some issuers are viewing loan-level data and analytics as a way to get better execution for their deals.

“I think there is more progress in issuers seeing [data] as a competitive advantage,” Ullrich said. 

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