DTCC ADDS SETTLEMENT CAPABILITIES TO LOAN/SERV SUITE

Posted June 16, 2009

NEW YORK – The Depository Trust & Clearing Corporation (DTCC) Loan/SERV advisory committee has endorsed plans to add cash settlement capabilities, including delivery versus payment (DVP), to the Loan/SERV suite of services that is helping to automate and streamline the processing of syndicated commercial loans on a global basis.

“Delivery versus payment will provide certainty to loan traders that cash settles simultaneously with changes to asset ownership recorded by the agent banks,” says Chris Childs, Vice President, Global Loans Product Management, DTCC. “This service will complement our existing Loan/SERV Reconciliation and Messaging Services, both introduced in 2008, that automate and facilitate the trading and tracking of syndicated loans for both agent banks and lenders. By providing a DVP capability, Loan/SERV will dramatically reduce risk and provide greater certainty in the syndicated loan market.”

DTCC plans to issue an outline detailing how the settlement process will work. DTCC’s Loan/SERV advisory committee includes representatives from the Bank of New York Mellon, Barclays Capital, Citi, Deutsche Bank, JPMorgan, and the Royal Bank of Scotland.

“For more than three decades, DTCC has provided stability and resilience in the financial infrastructure, successfully managing risk across a broad set of financial instruments and markets,” said Marc Romain, Managing Director of Barclays Capital. “Who better to bring the same stability, transparency and risk reduction to the global syndicated loan market than DTCC?”

JPMorgan recently moved into full production with DTCC’s Loan/SERV Reconciliation Service after uploading its syndicated loan data to DTCC. The Reconciliation Service enables agent banks and lenders to view and reconcile loan positions on a daily basis.

“This will be another giant step for the syndicated loan market, making the market more secure and helping ensure that settlement takes place, accurately and on time,” says Eric Rosen, Managing Director at JPMorgan.

Citi and Deutsche Bank are also already in full production with the Reconciliation Service. Together, these banks represent a significant share of the global syndicated loan market.

“As a global bank involved in syndicated lending, we needed a global solution that enabled our customers to check and reconcile loan positions quickly and efficiently,” says Atilla Karasapan, Managing Director at Citi. “Loan/SERV now provides the loan market with such an industry-wide automated facility to check daily balances. We expect the proposed Loan/SERV DVP capability to reduce settlement risk and lead to growth in the loan market. ”