The challenge

A large US Asset Manager wanted to understand its exposure to IBOR across a variety of assets they held (CLOs, RMBS, CMBS etc) to identify any risks associated with the cessation of IBOR and subsequently define a remediation strategy.

They wanted to understand the position they would have based on the impact of the remediation strategy.

Our response

The client reviewed Likezero against three other software solutions and selected Likezero due our ability to deliver the project in 25% of the time and cost of our competitors. Additionally, our proven track record of delivering market leading IBOR transition projects coupled with domain expertise gave the client confidence that Likezero was the best solution.

Across a 5 week period we were able to:

1_ Understand the impact: We loaded all the asset managers documents and rapidly built a contracts inventory which enabled our client to understand relationships across products, documents and entities.

2_ Analyse the impact: We analysed the legal language within the contracts inventory to identify the impacted scope uncovering:

95% referenced IBOR
90% of the RMBSs that were processed had exposure to IBOR
- Of this, 50% of the RMBSs exposed to IBOR had either no fallback or a fallback ending in a “dead end” (No alternative to IBOR)

3_ Define the remediation pathway: Based on the analysis we defined the remediation strategy for each document and confirmed the level of control the Asset Manager had over assets purchased.

3,000

total documents

75%

reduction on manual review

250 +

variations of “one month IBOR”
definition surfaced

Business outcomes

Enhanced risk management and mitigation strategy: Our client was better equipped to take proactive measurements to safeguard their portfolio.
Increased governance: Our detailed output report enabled our client to comprehensively track, assess and report on the transitions’ effects.
Informed insight into asset control: Intelligence into extent of control they possessed over the assets in their portfolio.
Minimised potential disputes and disruptions: E.g. confirming unanimous consent of bond holders.

Technical outcomes

Effective digitisation of complex tables.
Seamless management of fund/umbrella agreements.
Handled multiple entities and amendments.
Processed and managed intra-document complexities such as linking definitions and references.

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“I was completely impressed by the tool. I am certain it can do more than analyse contracts, and is the most accurate and powerful software that I’ve seen (everyone else is “CTRL-F”).”

Enterprise Risk Officer

Case study: Enhancing control in IBOR for US Asset Manager

The challenge

Our response

95% referenced IBOR

90% of the RMBSs that were processed had exposure to IBOR

Of this, 50% of the RMBSs exposed to IBOR had either no fallback or a fallback ending in a “dead end” (No alternative to IBOR)

Business outcomes

Enhanced risk management and mitigation strategy: Our client was better equipped to take proactive measurements to safeguard their portfolio.

Increased governance: Our detailed output report enabled our client to comprehensively track, assess and report on the transitions’ effects.

Informed insight into asset control: Intelligence into extent of control they possessed over the assets in their portfolio.

Minimised potential disputes and disruptions: E.g. confirming unanimous consent of bond holders.

Technical outcomes

Effective digitisation of complex tables.

Seamless management of fund/umbrella agreements.

Handled multiple entities and amendments.

Processed and managed intra-document complexities such as linking definitions and references.

“I was completely impressed by the tool. I am certain it can do more than analyse contracts, and is the most accurate and powerful software that I’ve seen (everyone else is “CTRL-F”).”

Legal Crisis Management