Principia Integrates Markit's ABS Pricing

Enhancement provides customers with access to pricing for 3,500 European securities including ABS, RMBS, CMBS and CDOs

Jersey City, New Jersey, 31 January 2006 - Principia Partners LLC, a leading solution provider for the management and administration of structured finance operations, today announced it has integrated European ABS (Asset Backed Securities) pricing from Markit Group Limited ("Markit") for the benefit of mutual customers. Markit is the benchmark industry source of independent pricing and valuations for the global financial and energy markets. This enhancement greatly augments the ability of the Principia SFP (Structured Finance Platform) solution to meet the portfolio management and operational processing requirements of structured finance operations as well as those of investment managers of ABS securities.

Markit, a pioneer of daily mark-to-market credit derivatives pricing, recently launched a new service that provides both composite and contributor pricing data on ABS securities issued in the European markets. The only multi-dealer platform for European ABS pricing, Markit's service is backed by over twenty leading market makers who provide same day bid / offer prices, and the spreads and average life assumptions on more than 3,500 European ABS. The coverage includes European Residential Mortgage-Backed Securities (RMBS), Commercial Mortgage-Backed Securities (CMBS), Asset-Backed Securities (ABS), and cash Collateralized Debt Obligations (CDO).

The integration of Markit's ABS pricing addresses one of the most critical gaps in the industry: the lack of independent pricing, which results in an inefficient process for end-of-day mark-to-market of ABS portfolios. Principia's clients are among the largest portfolio managers of ABS/MBS securities and structured credit products. With the Markit data integration, the Principia SFP solution enables these mutual customers to have additional precision and control over the management of their portfolios from deal entry through risk management, compliance and accounting. The solution can also be integrated with Intex ABS/MBS models. Intex is a leading provider of data, models and related software for the structured fixed-income market and the integration provides a comprehensive ABS/MBS management platform that can meet the needs of structured credit investment managers and structured finance operations for more deal transparency, timely position keeping and accurate accounting. Principia's integration of Markit's ABS pricing builds on the company's existing incorporation of Markit's CDS (Credit Default Swap) data.

"The ability to easily retrieve clean and accurate ABS pricing is more important than ever within the structured finance investment community," states Dr. Douglas Long, EVP - Business Strategy at Principia. "One of the biggest operational hurdles in managing ABS instruments today is the need to validate prices from dealers, often from multiple independent sources. The process is extremely manual, thus prone to human error, and still requires further manual processing for data scrubbing and preparation," he continued.

Once imported, pricing data from Markit can be further handled and analyzed within Principia SFP's robust cashflow and exposure (risk) framework. Users will be able to use prices to imply option-adjusted spreads as well as calculate risk attributes. Users will also benefit from the ability to manage ABS products along with liabilities (issuances or funding instruments) and derivatives on a single platform. This combination of broad functionality and integration helps to resolve a core technology issue for many structured finance operations such as structured investment vehicles and other securities arbitrage vehicles.

Kevin Gould, Executive Vice President of Markit and Head of Data Products and Analytics said, "We are pleased to offer mutual customers independent consensus pricing for the European ABS market, within the Principia product suite, and hope our efforts will boost efficiency and transparency in this fast growing asset class."

Markit expects to extend its ABS pricing service into the U.S. arena later this year.

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About Principia Partners

Principia Partners is a leading provider of advanced end-to-end processing solutions for structured finance and capital markets. The Principia SFP solution helps structured finance operations reduce risks and costs associated with their management and administration. It is a robust end-to-end platform designed to meet the common needs of structured finance operations, yet has the flexibility to meet the unique structuring and intensive processing requirements of the various types of operations. For capital market participants, the Principia System enables unified portfolio management, risk management and operations on a single platform that manages a wide range of vanilla and structured fixed income (including ABS/MBS and GICs), interest rate, foreign exchange, credit and equity indexed products. Its sub-ledger facilitates full compliance with both FAS 133 and IAS 39 accounting regulations.

Principia Partners is headquartered at the Harborside Financial Center, Jersey City, New Jersey, USA with an office at 1 Cornhill in London, UK. See www.principiapartners.com.

About Markit

Markit is the benchmark industry source of independent pricing and valuations for the global financial and energy markets. Markit has data contributed by over 50 dealing firms, and its services are used by 400 institutions globally. Areas of product expertise include OTC derivatives (credit, equity, FX, rates, inflation, energy, power, metals and structured products), corporate bonds, syndicated loans, dividend forecasting, and index and ETF management. Markit has most recently brought price transparency to the European asset-backed securities market with the launch of the first independent ABS pricing service. Markit's position in the derivative markets has been acknowledged by the industry with awards from Risk Magazine for Trading Initiative of the Year 2006 (Credit Event Fixings); ISR's Editor's Award for Innovation 2005; IFR's Innovation of the Year 2005 (Credit Event Fixings); Financial News' Best Derivatives Data Provider 2005; and Institutional Investor's Operations Management Award for Vendor of the Year 2005 (RED). For more information about Markit, see www.markit.com.

For press information contact:

Principia Partners
Andy Sephton / Shamira Alidina
Write Image
271 Regent Street
London W1B 2BP
Tel: + 44 (0) 20 7959 5492
Fax: + 44 (0) 20 7493 5499
Email: andy.sephton@write-image.co.uk
Email: shamira@write-image.co.uk

Markit
Teresa Chick
Director, Marketing and Communications
Tel: +44 (0)20 7890 5094
Email: teresa.chick@markit.com