Software Firms Tackle Market Woes

Asset-Backed Alert, October 19, 2007

At least two producers of software used by buyers and sellers of structured-finance products are hoping to profit from the recent credit crunch.

Securitisation Consulting of Dusseldorf, Germany, is working on an expanded and updated version of its “ABS Platform” — an Internet-based program that allows clients to monitor the performance of assets supporting their structured-product holdings.

Ever since the credit market turned sour around midyear, market players in the U.S. and Europe have found it difficult to assign accurate market values to asset-backed securities, mortgage bonds and CDOs they want to buy, sell or evaluate. Numerical Algorithms and Securitisation Consulting are promoting their offerings as aids that clients can use to clear such hurdles, albeit in different ways.

Securitisation Consulting’s update should be complete by mid-2008. “For the software companies, the market has changed dramatically in a positive sense,” Securitisation Consulting chief executive Yury Menchinskiy said. Potential customers are now asking how the company’s programs work, rather than questioning whether they’re needed in the first place, he said. “People need to monitor what they bought,” Menchinskiy added, referring to investments made earlier on.

Securitisation Consulting plans to cut in half the two months it now takes to customize, test and launch collateralmonitoring programs for each new user of its ABS Platform. It’s also pulling deal information from a wider variety of sources.

The shop has been expanding its staff to support the initiatives. Securitisation Consulting’s headcount has doubled over the last year, to more than 20. Ten more are expected to join by yearend.