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Industry roundup: 2 October 2020

J.P. Morgan Asset Management partners with SAP on liquidity platform

J.P. Morgan Asset Management has announced a partnership with the SAP Software Solution Partner Program. Leveraging SAP's cloud platform, the firm's liquidity management platform Morgan Money is now available to SAP customers through SAP Treasury Management, a solution within the SAP Intelligent Enterprise offering customers real-time cash visibility and allowing them to improve liquidity and lower risk.

"The agreement will enable SAP's substantial treasury management customer base to directly access Morgan Money, delivering a real-time dashboard to invest, a single access point for operations, and enhanced risk management controls," said Paul Przybylski, head of Product Strategy for Global Liquidity, J.P. Morgan Asset Management.

"Corporate treasurers are looking for a streamlined customer experience," added Falk Rieker, global head of IBU Banking at SAP America. "J.P. Morgan Asset Management's SAP partnership is a great example how we enable our customers to consume innovative financial solutions and services."

J.P Morgan Asset Management's institutional liquidity management platform, Morgan Money, is a multi-currency, open architecture trading and risk management system. The platform, launched in 2019, is designed to deliver a seamless customer experience, centred on operational efficiency, end-to-end system integration, and effective controls to allow customers to securely invest when, where and how they want.


Olam secures Singapore’s first SORA-pegged club loan of SGD200m with DBS and ICBC

Global food and agri-business Olam International Limited has secured Singapore’s first club loan pegged to the Singapore Overnight Rate Average (SORA) with DBS Bank (DBS) and Industrial and Commercial Bank of China, Singapore Branch (ICBC Singapore).

The SGD200m one-year committed revolving credit facility is also the industry’s first SORA-pegged club loan coupled with a cross-currency swap. This gives Olam the option to enter into a SORA cross-currency swap with DBS at the start of each interest period, giving added certainty on interest rates and swap SGD proceeds into USD.

The SGD200m SORA-based loan and the cross-currency swap marks a milestone in the Singapore’s transition roadmap set out by the Steering Committee for SOR Transition to SORA (SC-STS) towards adopting SORA as the new interest rate benchmark for the Singapore Dollar cash and derivatives markets. Given SORA’s growing importance as an interest rate benchmark in SGD financial markets, it supports the Association of Banks in Singapore and the Singapore Foreign Exchange Market Committee (ABS-SFEMC)’s efforts to develop new SORA-based markets. 

Undertaken by Olam with its wholly owned subsidiary, Olam Treasury Pte. Ltd. (OTPL), the loan facility’s interest rate comprises two components: (1) a compounded daily SORA rate calculated in arrears and (2) an applicable margin.

Proceeds from the loan will be applied towards general corporate purposes of Olam and its subsidiaries. DBS and ICBC have been appointed Mandated Lead Arrangers and DBS is the Sole Bookrunner and Facility Agent for the loan.


Deutsche Bank clears first ESG credit derivatives benchmark trade

A credit derivatives benchmark designed to encourage ESG investing has now started clearing though the London Stock Exchange’s LCH CDSClear service, with Deutsche Bank executing and clearing the first ever trade. The client on this transaction was Union Investment, a German fund manager.

The iTraxx MSCI ESG Screened Europe index allows a range of investors, including fund managers, pension funds, banks, insurance companies and hedge funds, to invest in bonds issued by European companies, screened by their ESG credentials. The index is based on the iTraxx Europe index series and tracks some of the most liquid parts of the European credit default swaps market. It then filters out entities that do not meet certain strict ESG criteria.

Offering clearing for trades in this index helps investors manage counterparty risk better and increases liquidity, thereby helping the industry increase its focus on sustainability-linked products. The index launched in June this year, with Deutsche Bank one of the first banks to make markets in derivatives linked to it.

“Facilitating clearing access to this new ESG index series at CDSClear supports our commitment to sustainable investment and demonstrates our ability to respond quickly to our clients’ priorities," said Florian Peter, head of OTC Clearing at Deutsche Bank. "CDSClear’s offering will provide significant margin and operational benefits.”

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