#USA #Arlington #Equifax #RiskSpan #Asset-Backed Finance

RiskSpan Introduces Innovative Analytics for Auto and Personal Loans

RiskSpan, a renowned data analytics provider in the structured finance sector, has made a significant advancement in the market by releasing a comprehensive suite of standardized credit and prepayment curves specifically tailored for auto and personal loans. These new analytics tools, derived from anonymized Equifax data, aim to enhance visibility into consumer loan performance. This marks a pivotal development in a domain where standardized analytics have traditionally been lacking.

Bridging the Analytics Gap

Historically, the consumer credit segments, particularly auto and personal loans, have been fragmented compared to the well-established residential mortgage sector. In mortgages, there exists a plethora of econometric models that have been utilized for decades. The same cannot be said for consumer loans, where stakeholders often find themselves navigating through a lack of useful performance data. Investors frequently rely on static default and prepayment assumptions that sometimes fall short, resulting in inaccurate risk projections and potential pitfalls in investment opportunities.

Recognizing this challenge, RiskSpan has transformed raw, loan-level performance data from Equifax into intuitive predictive curves, allowing market participants to integrate these insights into their cash flow models. This innovation not only provides immediate value but also opens the door for better decision-making in the market.

Features and Advantages of the New Curves

The newly released curves offer several crucial features:

• - Standardized Benchmarks: They provide a uniform standard for evaluating auto and personal loan performance, which is essential for industry analysis.
• - Segmentation: The analytics differentiate between loan terms and credit scores, capturing significant risk factors and market variations.
• - Comprehensive Analytics: They support rigorous benchmarking, stress testing, and scenario analysis for both public asset-backed securities (ABS) and private asset-backed finance (ABF) pools.
• - Regular Updates: RiskSpan will provide regular updates along with historical data, allowing investors to monitor trends in delinquency and prepayment behaviors continuously.
• - Predictive Insights: Beyond just performance metrics, these curves offer predictive insights into collateral performance, which can lead to more informed pricing, valuations, and risk management strategies.

Customized Solutions for Investors

With these innovative curves at their disposal, investors and asset managers can significantly enhance their decision-making processes:

• - Improved Buy/Sell Decisions: Investors can leverage the higher-quality analytics to make more informed decisions in the consumer loan markets.
• - Optimized Risk-Adjusted Pricing: By replacing outdated assumptions with data-driven metrics, they can improve capital allocation and better manage their portfolios.
• - Risk Management Enhancements: The ability to identify potential value earlier means investors can avoid overpaying for poorly performing assets, thus maximizing their returns.

As Jen Press, Chief Strategy Officer at RiskSpan, aptly states, "These new curves empower investors with the tools they need to bring the same level of rigor to consumer credit markets that they already apply in residential mortgages." This new suite not only equips clients with the capacity to manage risk with enhanced precision but also helps them spot opportunities with greater confidence.

Melinda McBride from Equifax echoes this sentiment, emphasizing that increased data transparency fosters improved decision-making in the traditionally underserved private ABF ecosystem.

About RiskSpan

RiskSpan stands out as a comprehensive analytics solution catering to both public and private credit investors in the structured finance sector. Their innovative platform ensures that clients can make faster, more accurate trading decisions while fulfilling reporting requirements efficiently, thereby optimizing resource usage.

To learn more about their groundbreaking services, visit www.riskspan.com. This latest development underscores RiskSpan's commitment to providing insightful, data-driven solutions that enhance transparency and foster innovation in the finance industry.