DTCC Will Provide Cash Settlement for the Global Syndicated Loan Market

The first DVP service introduced for the loan trading space
NEW YORK & LONDON--(Business Wire)--
The Depository Trust & Clearing Corporation (DTCC) today announced that its
Loan/SERV advisory committee has endorsed plans to add cash settlement
capabilities, including Delivery versus Payment (DVP), to its Loan/SERV suite of
services that is helping to automate and streamline the processing of syndicated
commercial loans on a global basis.

"Delivery versus payment will provide certainty to loan traders that cash
settles simultaneously with changes to asset ownership recorded by the agent
banks," said Chris Childs, DTCC vice president, Global Loans Product Management.
"This service will complement our existing Loan/SERV Reconciliation and
Messaging Services, both introduced in 2008, that automate and facilitate the
trading and tracking of syndicated loans for both agent banks and lenders.

"By providing a DVP capability, Loan/SERV will dramatically reduce risk and
provide greater certainty in the syndicated loan market," said Childs. In the
near future, DTCC will issue an outline detailing how the settlement process
will work.

DTCC`s Loan/SERV advisory committee includes representatives from the Bank of
New York Mellon, Barclays Capital, Citi, Deutsche Bank, J.P. Morgan, and the
Royal Bank of Scotland.

"For more than three decades, DTCC has provided stability and resilience in the
financial infrastructure, successfully managing risk across a broad set of
financial instruments and markets," said Marc Romain, managing director of
Barclays Capital. "Who better to bring the same stability, transparency and risk
reduction to the global syndicated loan market than DTCC?"

DTCC continues to work with its advisory committee and other market participants
to finalize the settlement system that will provide the DVP capability. A
timetable for testing and production will be issued in the third quarter.

"This will be another giant step for the syndicated loan market, making the
market more secure and helping ensure that settlement takes place, accurately
and on time," said Eric Rosen, managing director at J.P. Morgan.

J.P. Morgan, the largest global agent bank in the syndicated loan market,
recently moved into full production with DTCC`s Loan/SERV Reconciliation Service
after uploading its syndicated loan data to DTCC. The Reconciliation Service
enables agent banks and lenders to view and reconcile loan positions on a daily
basis. Prior to the launch of this service, lenders and banks reconciled loan
positions independently of one another, a process prone to errors,
miscalculations and delays.

J.P. Morgan joined two other global banks - Citi and Deutsche Bank - which are
already in full production with the Reconciliation Service. Together these banks
represent a significant share of the global syndicated loan market.

"As a global bank involved in syndicated lending, we needed a global solution
that enabled our customers to check and reconcile loan positions quickly and
efficiently," said Atilla Karasapan, managing director at Citi. "Loan/SERV now
provides the loan market with such an industry-wide automated facility to check
daily balances. We expect the proposed Loan/SERV DVP capability to reduce
settlement risk and lead to growth in the loan market. "

Loan/SERV is an evolving suite of services that will provide a comprehensive,
integrated solution for the syndicated loan market. In addition to the
Reconciliation Service, DTCC`s Loan/SERV Messaging Service provides a secure and
automated network for the transmission of standard loan messages between agent
banks and lenders in the syndicated loan market.

Loan/SERV is a service of DTCC Solutions LLC, a subsidiary of DTCC.

About DTCC

The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries,
provides clearance, settlement and information services for equities, corporate
and municipal bonds, government and mortgage-backed securities, money market
instruments and over-the-counter derivatives. In addition, DTCC is a leading
processor of mutual funds and insurance transactions, linking funds and carriers
with financial firms and third parties who market these products. DTCC`s
depository provides custody and asset servicing for more than 3.5 million
securities issues from the United States and 117 other countries and
territories, valued at $27.6 trillion. Last year, DTCC settled more than $1.88
quadrillion in securities transactions. DTCC has operating facilities in
multiple locations in the United States and overseas. www.dtcc.com

DTCC
Edward C. Kelleher, 212-855-5301
eckelleher@dtcc.com

Copyright Business Wire 2009