Reference Cashflow Database (RCD)
The rapid growth of asset-backed credit default swaps (ABCDS) has brought numerous challenges to the market. Unlike CDS on unsecured debt, ABCDS have a “pay as you go” structure where payment shortfalls are calculated monthly. Because data availability to conduct these calculations is suboptimal and complex, the interpretation of contract documents often varies. These variances create mismatches, operational burdens, tight windows for payment notices and delivery, and complicate ISDA settlement calculations. Markit’s Reference Cashflow Database (RCD) service acts as the central monitoring and settlement platform for the ABCDS market. Our RCD calculation engine greatly simplifies complex settlement calculations and reduces failure rates with payment matching and clearing. With Markit RCD, clients can resolve cashflow payment discrepancies with a single enquiry, replacing numerous counterparty conversations.
With Markit RCD, clients can reduce expenses and operational burdens, keep pace with the rapid growth of ABCDS, and gain quick entry into the ABCDS market without building a costly infrastructure.
Markit RCD is the market standard for determining monthly settlements for ABCDS.
Markit RCD: At-A-Glance
- Resolve cashflow payment discrepancies with one call to Markit
- Calculate all monthly settlements within two business days of bond payment date, including Interest Shortfalls, Principal Shortfalls, Writedowns and all Reimbursements
- Automate the settlement and delivery amounts via XML file and the generation of payment and termination notices
- Evaluate trade performance and the impact of different cap options, current or theoretical trades
