April 11, 2023 - The LSTA applauds the continuing momentum as Deutsche Bank, Morgan Stanley, U.S. Bancorp, and Wells Fargo became the latest to invest in Versana’s transformative digital data platform. Their collaboration and $40 million new equity capital investment with initial stakeholders – JPMorgan, Bank of America, Citigroup, and Credit Suisse – strongly indicate that the leading banks are now, more than ever before, ready to bring a long-awaited modernization to the $5 trillion syndicated loan market. With clients eager to participate in the improvements, U.S Bancorp, a leading CLO trustee, will assist in creating the network effect with the asset management community to accelerate product adoption.
And this comes just in time, as brokers, dealers, underwriters, institutional investors, custodians, trustees, and fund administrators have staffed their teams with digital natives, who demand digital efficiencies. It has become evident that the newer entrants to this space live their lives in a digital technological world, a world where anything that can be automated, should be. They are interested in analysis, strategy and work that is meaningful and impactful – and certainly don’t view their careers through the lens of performing repetitive tasks.
So rather than prolonging conventional antiquated processes, Versana, a syndicated loan platform, will digitally capture agent banks’ reference data directly from the sources on a real-time basis into one centralized database. With the addition of three more administrative agents contributing deal data, Versana expects to have more than 75% of U.S. loan market deals on its platform in real-time. Lenders will be able to view outstanding positions, commitments, contract level details, interest/principal accruals and transaction histories relating to the deals and facilities in which they are lenders of record in one centralized database. This will enable a lender to swiftly reconcile discrepancies between the Agents’ and lender’s records, significantly reducing the need to contact the agents.
Agents typically freeze settlements from a couple of days to a week or more to calculate interest/principal payments at month and quarter end. Since lenders of record will have access to this information in real-time, the concept of providing “notices” relating to paydowns, rollovers and resets will become outdated. In the future, Versana will transmit digitized events to lender and custodian systems in real-time via APIs. This will exponentially reduce settlement freezes while improving data accuracy and workflow.
The LSTA’s suggestion? Engage to boldly drive real change! When – not “if” —all agents provide their data to Versana in real time, we will have a significant gamechanger, namely greater transparency, interoperability and scalability that will lay the groundwork for future innovation.