Bloomberg Identifiers Extended to Syndicated Loans04.24.2015
Bloomberg’s Financial Instrument Global Identifier (FIGI) specification has been expanded to include syndicated loans, with U.S. Bank becoming the first corporate trustee to adopt the standard for syndicated loans that are part of collateralized loan obligations.
By adopting this standard, CLO asset managers now have the ability to easily identify loans and create comprehensive reports to help investors better understand the performance of their investments, according to Bloomberg.
“U.S. Bank generates regular reports for the investors in those CLOs, so that they can look at a report for CLO number 123 and within it you see the underlying loans which are being used as collateral,” said Mark Betteridge, global product manager, syndicated loans and league tables at Bloomberg. “These reports are literally lists of loans, and by putting in the FIGI, any investor looking at one of the reports generated by US Bank will be able to see the loans, see the identifier and then simply go to a Bloomberg terminal to be able to pull that loan up.”
U.S. Bank is the largest trustee of CLOs globally. According to annual league tables published by Asset-Backed Alert, the bank was trustee on 45% of CLO issuances in 2014, up from 32% in 2013, 26% in 2012 and just 8% in 2011.
“We’ve been able to gain market share by investing in people and technology that improves our clients’ experience,” said David Keys, senior vice president for U.S. Bank Global Corporate Trust Services. “Along those lines, we were interested in Bloomberg’s FIGI methodology because it creates a simplified and more transparent process than what our industry has previously been able to offer.”
FIGI– which is based on Bloomberg’s Open Symbology for naming securities using a unique 12-digit alpha-numeric identifier — specifies the structure and semantics of global identifiers, how they are constructed and validated, and their relationship with other financial information.
Many of the systems in use across the securities industry have been built around proprietary, closed methodologies for identifying financial securities.
Securities to which FIGIs can be issued include common stock, options, derivatives, futures, corporate and government bonds, municipals, currencies, and mortgage products. Unique FIGIs identify securities as well as individual exchanges on which they trade. Composite FIGIs are also issued to represent unique securities across related exchanges.
Last year, nonprofit technology standards consortium Object Management Group voted to adopt FIGI as the standard methodology for identifying financial instruments, such as syndicated loans in CLOs.
“FIGIs apply to any financial instrument, be it a bond or a treasury or a commodity or a syndicated loan,” said Betteridge. “We were very excited to be able to use that identifier now on loans and put that to practical use to make it easier for clients.”
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