September 26, 2011

BNY Mellon Offers New "Cash on Transfer" Service for Syndicated Loan Market


MJX Asset Management first client to settle trade using platform

NEW YORK, September 26, 2011 — BNY Mellon, the global leader in investment management and investment services, is one of the first institutions in the country to introduce a new service to its corporate trust clients that will allow for the simultaneous transfer of a client's cash and loan assets on the agreed settlement date.  

The service, Loan/SERV Cash on Transfer, is the first delivery-versus-payment platform for secondary loan trading.  BNY Mellon is one of only five institutions that participated in a pilot program for the service, which was developed by The Depository Trust & Clearing Corporation (DTCC) and Markit, and the first company to facilitate a trade to settlement using the platform.

It delivers bottom-line benefits to clients by helping them more effectively manage risk around cash transfer and reducing both the administration and fee costs associated with multiple transactions.  Loan/SERV Cash on Transfer supports U.S. dollar trades and is expected to expand over the next year to support cash settlement in 50 currencies.

MJX Asset Management, a New York-based specialized asset management company with experience in investing in the leveraged loan market, is the first BNY Mellon client to have settled a trade using the new platform.

"We believe this service will significantly decrease settlement time and make the loan closing process even more efficient," said Pierre Batrouni, managing director at MJX Asset Management.  "We are delighted to have participated in piloting this innovation that brings much-needed change to the industry."

"Improvements in transparency, efficiency and risk reduction are integral to the continued growth of the loan syndication market, and the new service should increase the efficiency of trading and settlement of this asset class," said Jocelyn Lynch, managing director of structured products at BNY Mellon Corporate Trust.  "We will continue to work with key partners to help modernize the syndicated loan market and bring the industry closer to a straight-through processing model."

"By paying one netted figure, rather than multiple counterparties, Cash on Transfer simplifies the settlement process, reduces fees involved with multiple payments and boosts a company's overall capital efficiency and cash utilization," said Mathew Keshav Lewis, DTCC vice president, Global Loans Product Management.  "Given that large lenders may be settling significant trade volume each day, this streamlines the process and represents substantial savings."

BNY Mellon Corporate Trust services $11.8 trillion in outstanding debt from 61 locations in 20 countries. Its clients include governments and their agencies, multinational corporations, financial institutions and other entities that access the global debt capital markets. The corporate trust business utilizes its global footprint and expertise to deliver a full range of issuer and related investor services and to develop customized and market-driven solutions. Its range of core services includes debt trustee, paying agency, escrow and other fiduciary offerings.

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets.  BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team.  It has $26.3 trillion in assets under custody and administration and $1.3 trillion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.7 trillion per day.  BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK).  Additional information is available at www.bnymellon.com and through Twitter @bnymellon.