U.S. Federal Home Loan Banks (FHLBanks) of Atlanta, Boston, Cincinnati, Des Moines and New York have now been successfully using Principia Partners' Principia Structured Finance Platform (Principia SFP) for 15 years.
The five regional home loan banks, which were among Principia’s earliest adopters, are currently using the platform to perform their debt issuance and associated hedge valuations, operational straight through processing and accounting activities.
Principia said that the FHLBanks typically manage their debt issuance as well as a wide array of fixed income investments and complex hedging instruments using the software. The banks also found that Principia SFP was unique in its ability to accurately model and price the advances made to their community bank members. Often these products are structured with callable and embedded optionality features that are not handled well by other solutions.
Usage of the platform has expanded significantly as Principia has worked with the FHLBank sector. The platform is now also used by the banks for its extensive reporting capabilities, workflow control and automated accounting. From front to back office, the banks are able to analyze highly structured fixed income investments, including asset backed and mortgage backed securities and value associated hedges, issued debt and FHLBank advances. On the same system they can then summarize the resulting accounting entries to accurately and more efficiently assess and report on the effectiveness of hedging relationships.