The American Securitization Forum (ASF) and Standard & Poor's Fixed Income Risk Management Services (S&P FIRMS) launched a new standardized universal code for identifying critical information about individual loans that are securitized in the MBS and ABS markets.
FIRMS is an analytics and research unit separate from S&P's ratings business that delivers solutions to help investors perform analysis on the financial instruments in their portfolios,
The new global ASF Loan Identification Number Code (ASF LINC(TM)) is a sixteen digit identification code that captures underlying loan type, origination date and country of origin, aside from randomized alphanumeric data, to create a unique ID for a wide range of loans that can be pooled as well as sold into the capital markets.
It is linked to the CUSIP and/or ISIN number of the securitized product, allowing investors to track the loan throughout its lifetime and provide a chain of accountability between loan originators and investors. The ASF LINC creates standardization and consistency in connecting and reporting a loan's monthly performance data. It also connects added value data and information from third party providers like credit bureaus. Assigned at no cost to issuers, the ASF LINC is stored in a central loan data repository administered by S&P FIRMS.
"A major goal of ASF Project RESTART is to improve information flows to investors via enhanced disclosure and reporting,” said Tom Deutsch, deputy executive director of the ASF. “The global ASF LINC will be instrumental in meeting this goal, as it offers investors, for the first time, the ability to follow a loan throughout its life.”
The code is a foundational component of ASF's Project RESTART initiative to improve the securitization process and reshape critical information and data flows with market-based solutions. Providing detailed information on the underlying collateral in these kinds of products, the global ASF LINC has been developed in a format that is readily integrated into existing computerized analytics and risk modeling programs used by investors, governments and regulators in evaluating MBS and ABS portfolios.
"The global ASF LINC allows investors across a wide spectrum to track a loan from, literally, Main Street to Wall Street, identifying counterparties, obligors and other crucial risk criteria through the lifecycle of the loan no matter how many times it is bought, sold or securitized," said David Goldstein, managing director, fixed income risk management services at S&P. "Best of all, the code provides a higher level of transparency and protects sensitive borrower privacy-protected information."