2024 Loan Platforms Update: Accelerating Efficiency and Innovation

2024 Settlement Times - A return to pre-COVID numbers

Settlement times globally in the first part of 2024 were lower than we have seen since the pre-COVID era. After January (18.4 days), the Loan Syndications and Trading Association's (LSTA's) T+ came in at 15.6, 15.1, and 15.6, respectively, through the end of April. The last quarter to see a time below 15.6 in the LSTA market was the fourth quarter of 2019. The Loan Market Association's (LMA) average settlement time kicked off the year at a low 39.9 days and proceeded to decrease further to 37.5 days in April. The last time the LMA market sustained times under 40 days was the last two quarters of 2019.

These numbers are a sign of shared successes for dealers, buy side, and agents alike with the challenges faced as operational models across the world transformed overnight. This is a motivator to continue working towards lower times as new industry initiatives and functionalities in ClearPar, S&P Global Market Intelligence's electronic trade processing ecosystem for syndicated loans, drive efficiencies through the rest of 2024.

Innovations in Functionality: Penny Changes

March saw the release of ClearPar's long-awaited "penny change" automation. Agents can now systematically enter "commitment change requests" under $1, and counterparties have the option to pre-approve such a change. If both parties are set for pre-approval, the change is immediately processed, and the trade can close. This new feature eliminates the need for timelines by all parties and manual changes to a trade, a process that can sometimes delay a trade by multiple days. To date, over 9,000 trade accounts have been enabled for automation, across over 120 institutions globally. On average, ClearPar sees over 150 master trades per day include a penny change request from the agent and around 40% utilize the auto-approval. With key dealers still needing to enable the functionality, there remains significant opportunity to enhance the value of the feature even more throughout 2024. Considering that approximately 12.5% of trades per day involve a penny change, this solution can deliver tangible impacts to the market.

More Solutions to Come in 2024

In the months ahead, the Loan Platforms site is scheduled to release new features expanding the scope of the offering and bringing additional efficiencies and capabilities to existing features. For example:

Multi-stream Messaging: ClearPar can now deliver messages from a single trade account to multiple recipients downstream. This means users with existing integrations via S&P Global Market Intelligence's WSO software, or other internal systems, can consume a parallel message with trade updates, statuses, and settlement details in real time. Please contact us for more information on how to keep closer track of your ClearPar trades in real time.

ADFlow User Experience Updates: With the coming requirement September 1st for all ClearPar trading parties to be onboarded to ADFlow - an online portal to self-manage, approve, and publish Administrative Details Form (ADF) data with four-eye checked standard settlement instructions (SSI) details - investments are being made to enhance the user experience across the site. Look for improved SSI data point entry, consolidated ADF and SSI approval workflows, and a single ADFlow tab enabling users to add/modify data and publish all from one screen.

Master Participations: Working closely with client users across the sell and buy side, ClearPar is developing new features to support master participation settlement. A dashboard will link trades as part of the same deal, retain a fully executed version of the document, generate an executable master schedule, and enable elevation to the agent both pre- and post- settlement of participation. This will support the full participation workflow through to elevation and future features will be introduced including support for the soon-to-be-common ESA or Expedited Settlement Agreement.

Tax Utility Integration: ClearPar will soon integrate directly with S&P Global Market Intelligence's market-leading Tax Utility. This connectivity will ensure that buy side tax forms are validated prior to delivery to dealers via the utility or ClearPar and ADFlow's user interface. Leveraging S&P Global's validation, forms will only be reposted upon expiration and any new documentation will go through the validation process anew. Ensuring that there is no longer a discrepancy between what was previously validated to what currently is displayed on ClearPar and ADFlow will eliminate many tax-related queries and prevent withholdings where avoidable.

2024 has already stamped itself as a year defined by progress both across the market and within S&P Global Market Intelligence's product offering. This includes supporting lower settlement times, driving entity data towards security and standardization, and delivering further enhancements to expand the scope of an established and growing network and solution set.

The Loan Platforms team enjoys engaging with clients to discuss the planned roadmap and hear feedback, so please do not hesitate to contact the team.

In the next blog in this series, James Irwin, Executive Director of Business Development for Loan Platforms, will take a close look at developments and trends in the ever-active EMEA loan market. James will also be speaking at the LMA Loan Operations Conference - Challenging the Timeline on June 6th in London, taking a deep dive into the trade settlement timeline and how greater efficiency can be achieved through standardization, behaviors, and technology.

S&P Global provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.