Pricing provider announces push into CLO valuations

Thomson Reuters has announced a push into the increasingly active area of CLO valuations, with the launch of an evaluated pricing service. The company will provide end of day valuations using the same data delivery mechanism it uses for prices on other securities.

It says that it will use Moody’s Analytics’ CDONet library to help it come up with the prices, as well prices on underlying loans from its own LPC loan pricing service. Thomson Reuters will price both US and European cashflow CLOs based on both broadly syndicated and mid-market loans.

The company is hoping to take advantage of the pressure from regulators for independent valuation of funds’ investments. According to Creditflux’s soundings, CLO fund managers use a variety of different ways to value their portfolios. These range from other large evaluated pricing services to quotes supplied by brokers.

Among the main existing valuation providers are Standard & Poor’s and Markit, which both offer evaluated pricing for a number of CLOs. Another large evaluated pricing service, Interactive Data, currently offers pricing for US mid-market CLOs only, but is considering expanding this to include other CLOs.