CDO Software wins Credit magazine’s Technology Innovation Award

London November 10, 2008

Credit Technology Innovation Awards

For the majority of the institutions Credit covers, the turmoil that struck our market in 2007, spilling over into the financial system in general, has had no silver lining. But in any free market, adversity often brings with it opportunity, and the technology firms in the following pages are all seeking ways to bring their expertise to bear on the challenging market we face.

From portfolio compression to accounting, each hopes to provide a service that will help the market navigate the treacherous straits in which it finds itself and, of course, make money in the process. This is the first time Credit has singled out individual companies in this sector for their achievements, although our technology news coverage is long-standing. Rather than nominate categories for each firm to contest, we have opted for an overview of the most interesting innovations of the past year, and look forward to covering this side of the market in detail in the months to come.

CDO Software

Credit Rating Alliances

The past year has seen CDO Software, which provides management tools for the structured credit derivatives market, integrate the rating models of the three major rating agencies, Standard & Poor's, Moody's Investors Service and Fitch Ratings, into its CDO Director management tool for real-time management of CDO portfolios.

By integrating collateralised debt obligation rating agency models, CDO Software can help firms with their CDO data and trade capture, monitoring and substitutions, with the added benefit of integrating this with analytics models. All results can be delivered to a firm's clients using the professional reporting package, saving time during month-end reporting, all in an audited environment.

"Incorporating the rating agency models enables CDO Software to offer investors and participants in the structured credit market an integrated platform for performing credit risk analysis on their CDO portfolios," says Sunay Shah, CEO and co-founder of CDO Software in London.

The tool obtains agency metrics including scenario loss rates, synthetic rated over-collateralisation (SROC), Moody's metrics and Fitch RDR. This helps when running substitutions and executing trades quickly to improve credit cushion; particularly beneficial is the ability to stress a portfolio in present market conditions.

Shah adds: "We are fully committed to working with the rating agencies and delivering an integrated solution so that market participants have tools to manage their portfolios efficiently. There is a need to bring confidence back to the market, and CDO Software can help by developing technology to provide transparency at a time that is critical for managers and investors."

CDO Software was co-founded by Brett Paton and Sunay Shah in 2005.