Bondholder Communications Lowers Credit Risk

Moody’s has published an important report citing the credit benefits of Bondholder Communications for issuers. The report builds on the efforts of the Structured Finance Investor Group (SFIG) and notes that adoption of the SFIG proposal for a common communication platform would be a credit positive for issuers. Here at DealVector we certainly believe so, since it is the reason we built the business!

Here is the report announcement:

The Structured Finance Industry Group’s (SFIG) investor member proposal for a common communication platform for residential mortgage-backed securities (RMBS) issuers and investors would be credit positive for future transactions if adopted.

» Facilitating communication amongst transaction parties reduces information asymmetry and improves transparency.

» It also improves and streamlines voting and consent processes, potentially avoiding some losses.

In its RMBS 3.0 Green Paper, Fifth Edition, published on 7 December 2016, SFIG has published a proposal by its investor members for a bondholder communication platform to improve communication between issuers and bondholders, and amongst bondholders themselves. The proposal is in the formative stage and is subject to review and revision.

The overarching principles for such platform include 1) that it be administered by a third party, (2) that it provide free access to all investors and 3) that it support notifications sent by transaction parties, communication amongst authenticated bondholders and voting process for consent solicitations. The proposal also lays out recommended system criteria and specifications covering technology, access, authentication, communication, record keeping and security.

Click here to read the full article.”

DealVector is the premier bondholder communications platform, dedicated to improving communications among issuers, investors, and all parties in the market.