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[ARTICLE] The Bond Buyer reports on DPC’s New Mapping Tool

Lynne Funk, Innovation Editor for The Bond Buyer, covered our Obligor and Sector Mapping in a September 23 article, "DPC DATA tool to map directly to underlying obligors of muni debt."

As The Bond Buyer article reports, the new Obligor and Sector Mapping product is an offshoot of development work on financial data DPC has been collecting and working on in the past few years. This particular tool has been under development for the past year.

The article continues with Triet Nguyen, DPC vice president of strategic data operations, pointing out, “Anyone in the muni market knows there is a lot of legacy reference data we have now that does not have a consistent way to identify or drill down into the underlying obligors. Legacy systems often simply identify purpose but not who the obligor is. Who is paying the debt service? All too often, they default to vague categories such as ‘Facilities’ or even ‘Miscellaneous. This is an industry problem we’re trying to solve.”

Bond Buyer coverage of Obligor Mapping

Also covered are the four areas the tool is expected to address: Risk identification and aggregation; compliance with investment diversification rules; trading; and bond pricing and evaluation.

Accurate obligor identification can allow any matrix-based bond evaluation system to improve pricing accuracy and reduce manual intervention by pricing analysts. The goal is to identify the sector and subsector, focus on the nature of the borrower and or the pledged revenue source and not on use of proceeds.

Ronak Patel, DPC vice president of product management, comments that the obligor and sector data is mapped to the CUSIP-9 level. It’s currently tough to do comparisons between two entities and two different sectors, he says. “We have been trying to at least correctly identify the correct obligors with about 100 sectors and subsectors to have something more precise that, say, the broker-dealer side can trade off of.”

Read the entire article on The Bond Buyer website. Learn more about Obligor and Sector mapping, which is part of our growing MuniCREDIT Solutions portfolio.

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