Ipreo and Symbiont have announced that they are creating a new company to innovate manual processing in the global syndicated loans market which is estimated to be worth $3 trillion. The new business will deliver fully-automated settlement and maintenance by integrating Ipreo’s latest loan settlement platform and Symbiont’s smart contracts to cut settlement periods and costs.
Ipreo enables new issue workflow across the equity, fixed income, municipal and syndicated loan markets, with its existing syndicated loan platform used by a number of banks. Ipreo will contribute LTS, a recently developed loan settlement platform that incorporates a patented process, bringing securities lending to the loan market, facilitating borrows when sellers don’t have the loan asset available for scheduled settlement.
Symbiont is contributing its blockchain expertise and development of ‘SmartLoans’, smart contracts for the loan market. The smart contracts will eliminate the need for third-party intervention.
President and COO of Ipreo, Kevin Marcus commented: “We are delighted to be working with Symbiont to create an industry-wide solution to the loan settlement problem. With LTS, we addressed the legal and process problems that have plagued loan trade settlement. Our joint venture with Symbiont marries this solution with the transformative power of blockchain technology.”
The new business, which is yet to be named, will be headed by Joe Salerno, a 25-year industry veteran who currently heads loan trade settlement at Ipreo, with Robby Dermody, co-founder of Symbiont, as COO.
Mark Smith, CEO and co-founder of Symbiont, stated: “There’s a lot of talk about blockchain but little evidence yet of digital transformation on the front lines, so it’s great to lead the way. Ipreo is a perfect partner. Unlike some of the more vocal blockchain start-ups, it has an established track record and already plays a vital role in the smooth operation of the loan markets.”
Salerno remarked: “This business will benefit the entire syndicated loan market, from issuers through investors and regulators. Not only will it help the sell-side save tens of millions in capital costs, but loan portfolio managers will no longer have to endure the drag on yield caused by large cash buckets and costly credit lines.”