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Markit Launches CLO Pricing Service

The service uses observable market data and models to offer a transparent approach to CLO pricing.

Markit has launched a new service for the pricing of collateralized loan obligations (CLO) tranches.

“Syndicated loans and CLOs are a hot sector now,” according to a Markit spokesman, who said that Markit is pricing the tranches as they trade in the market. “We are the first to bring a transparent pricing methodology for the buy and sell side of this asset class,” said the spokesman. Unlike collateralized debt obligations (CLOs) and other structured products during during the credit crisis, CLOs have performed quite well for those that held on. Issuance is up and spreads have been narrowing over the past 9-to-12 months, said the spokesman.

The new service covers more than 5,000 investment grade tranches of U.S sand European CLOs and was launched in response to demand from customers for a high quality, independent data source for CLO pricing, the company said today. The data provided by Markit will be used for price discovery, price verification, valuation and risk management.

The service uses observable market data and best-in-class models to value CLOs, the data provider said. Markit will provide customers with detailed information on data inputs and the assumptions used in the evaluation process, ensuring transparent valuations. Customers will also gain access to Markit’s expert team of CLO evaluators in addition to a price challenge process.

Commenting on the new CLO service in today’s release, 
Nathan Kirk, Director and Head of US Securitized Products at Markit, said: “Markit’s transparent methodologies and expertise in gathering and using observable market data enables us to offer a cutting-edge approach to CLO pricing. We are pleased to extend our capabilities in providing high quality evaluated pricing services to the CLO market in order to support customer needs.”



The new service is an expansion of Markit’s evaluated pricing business for securitized products (residential mortgage-backed securities, commercial mortgage-backed securities and consumer asset-backed securities) and corporate, sovereign and municipal bonds. Later this year, Markit’s new CLO pricing service will be expanded to cover mezzanine and equity tranches of CLOs.


Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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