Category: News

• bondIT’s Scorable Credit Upgrade & Downgrade Forecast indicates that downgrade risk has increased by 7% in the Travel and Tourism sector, and by 3% for the Airline industry, in Q2 2022
• The Retail and Consumer Goods sectors also saw an average downgrade probability increase by 3% each
• The upgrade probability across all sectors has either stayed the same or decreased
• bondIT’s predictive credit analytics, powered by machine learning and explainable-AI, analyses more than 250 data variables daily including solvency ratios, capital requirements, profitability, and efficiency ratios

London/Berlin/Israel, 1 August 2022 – The latest Scorable Credit Upgrade & Downgrade forecast from bondIT, a provider of next-gen fixed income technology, indicates that the probability of achieving a negative change to a credit rating has increased most within the Travel and Tourism sector in the second quarter of 2022. The probability of sectors achieving a positive change has either stayed the same or decreased across all sectors.

Against a backdrop of rising fuel costs, staff constraints and strike action, the probability of a rating downgrade within the next 12 month is currently highest for credit issuers in the Travel and Tourism sector at 31%, followed by the Airline industry with 29%. For Hotels, Resorts, and Casinos – many of which will be impacted by the challenges facing holidaymakers – the downgrade probability has increased by 1% and the upgrade probability has also shrunk over the past quarter, from 21% to 19% (-2%).

Downgrade probabilities have also risen across the Consumer Goods and Retail sectors: the average downgrade potential in the Consumer Goods sector has increased by 3% in Q2 2022, from 12% to 15%, whilst the Retail sector downgrade probability has increased by the same amount, from 13% to 16%.

In addition to the rising downgrade risk, the upgrade probability has decreased across almost all sectors quarter-on-quarter, with the Consumer Goods sector seeing the biggest decrease in upgrade probability of -4%. Only the Aerospace & Defence and Banking sectors saw no change in their respective upgrade potential, which remained at 20% and 14% respectively.

“Stagflation is bad for bonds, particularly corporate bonds, delivering a one-two punch of higher interest rates and wider credit spreads to investors’ existing holdings. As the current strain of stagflation continues to infect various parts of the economy and financial markets, volatility is likely to remain high, so corporate bond investors will need to be hyper-vigilant to both risk and opportunity alike,” said David Curtis, Partner at bondIT. “Compared to the first quarter of this year, we’ve seen a notable increase in downgrade potential across a number of sectors. Amidst a more challenging environment with recessionary pressures impacting investor sentiment alongside an expected return of default cycles, the ability to anticipate critical rating changes ahead of the market has become a strategic imperative. Technology can significantly augment portfolio management and research processes so that investors can more easily manage risk, discover new investment opportunities, and build portfolios that optimally balance these risks and returns.”

 

 

bondIT’s credit analytics platform, Scorable, harnesses machine learning and explainable-AI to predict downgrade and upgrade probability of more than 3,000 rated corporate and financial issuers worldwide within a 12-month timeframe. The Rating Transition Model analyses more than 250 data variables daily including solvency ratios, capital requirements, profitability, and efficiency ratios. The platform provides actionable insights for investors, allowing them to monitor corporate bond ratings and spreads, and anticipate rating changes and investment opportunities, ahead of the market.

 

About bondIT

bondIT provides next generation front office investment technology. We combine Data Science, Explainable-AI (XAI) and Advanced Technologies with Fixed Income investment know-how to improve the performance, accuracy and efficiency of our clients’ investment processes and businesses. Our technology enables clients to efficiently build, analyze and rebalance investment portfolios, and achieve within minutes what previously took hours or days. Thanks to bondIT’s predictive credit analytics, investors can anticipate changes in corporate credit risk and capitalise on investment opportunities ahead of the market. The platform is highly flexible, being data agnostic and API or cloud based, and allows for the seamless onboarding of internal models as well as downstream connectivity to existing portfolio management and trading systems. bondIT is privately owned and paving the way for financial institutions of all sizes to integrate the power of greater technology in their investment processes. For more information, please visit www.bonditglobal.com.

• bondIT’s Scorable Credit Upgrade & Downgrade Forecast indicates that upgrade probability across the Aerospace & Defence sector has increased by 7% in Q1 2022 1
• Upgrade probability across the Energy and Travel & Tourism sectors has also increased by 5% and 4% respectively over the first three months of 2022 2
• The Automotive and Consumer Goods sectors see biggest rise in downgrade probability – 3% each 3
• bondIT’s predictive credit analytics, powered by machine learning and explainable-AI, analyses more than 250 data variables daily including solvency ratios, capital requirements, profitability, and efficiency ratios

 

London/Berlin/Israel, 27 April 2022 – The latest Scorable Credit Upgrade & Downgrade Forecast from bondIT, a provider of next-gen fixed income technology, indicates that the probability of achieving a positive change to a credit rating has increased most in the Aerospace & Defence sector in the first quarter of 2022. Conversely, the risk of a downgrade has risen most in the Automotive and Consumer Goods sectors.

Across the Aerospace & Defence sector, credit issuers have, on average, a 21% probability today of achieving a rating upgrade within the next 12 months, versus 14% three months ago (+7%). Upgrade probabilities have also risen in the Energy sector, from 18% since the start of the year to 23% (+5%) at the end of March.

Similarly, in Travel & Tourism, the average probability for an upgrade has increased by +4% (from 11% to 15%) over the past three months. However, credit issuers in the sector are becoming more polarised into winners and losers from a credit risk perspective, as the average risk of downgrades has also increased by 1% and Travel & Tourism companies are still those which, on average, carry the highest probability of a rating downgrade (25% today versus 24% three months ago).

The average downgrade probability for the Automotive sector has increased by 3% in Q1 2022, from 11% to 14%, whilst the Consumer Goods sector downgrade probability has increased by the same amount, from 8% to 11%.

bondIT’s predictive credit analytics platform, Scorable, harnesses machine learning and explainable-AI to analyse more than 250 data variables daily including solvency ratios, capital requirements, profitability, and efficiency ratios. The platform provides actionable insights for investors, allowing them to monitor corporate bond ratings and spreads, and anticipate rating changes and investment opportunities, ahead of the market.

 

Aerospace & Defence, Energy and Travel & Tourism Sectors – Upgrade Probability Over Q1 2022

 

Automotive and Consumer Goods Sectors – Downgrade Probability Over Q1 2022

 

Dr. David Curtis, Head of Global Client Business for bondIT, said: “Against the backdrop of the market volatility created by inflation, the war in Ukraine, central banks weaning markets off stimulus, and a cost of living crisis in many global economies, our predictive credit analytics show a highly changeable environment for credit investors. These macro issues have meant that, in some sectors, the probability of a credit upgrade or downgrade is materially different to three months ago. Moreover, the picture is not uniform within sectors – the average probability for an upgrade has risen in Travel & Tourism but so has the average probability of a downgrade. In other words, companies’ fortunes are no longer simply rising or falling with the macro tide but are becoming increasingly polarised. This, in theory, should be a period where active fund managers can demonstrate significant value through their security selection.”

 

About bondIT

bondIT provides next generation front office investment technology. We combine Data Science, Explainable-AI (XAI) and Advanced Technologies with Fixed Income investment know-how to improve the performance, accuracy and efficiency of our clients’ investment processes and businesses. Our technology enables clients to efficiently build, analyze and rebalance investment portfolios, and achieve within minutes what previously took hours or days. Thanks to bondIT’s predictive credit analytics, investors can anticipate changes in corporate credit risk and capitalise on investment opportunities ahead of the market. The platform is highly flexible, being data agnostic and API or cloud based, and allows for the seamless onboarding of internal models as well as downstream connectivity to existing portfolio management and trading systems. bondIT is privately owned and paving the way for financial institutions of all sizes to integrate the power of greater technology in their investment processes. For more information, please visit www.bonditglobal.com.

bondIT’s Scorable continues the expansion of its analytical universe with the addition of nearly 400 of the largest financial issuers in the global debt markets. Scorable’s Explainable-AI now predicts changes in the credit risk profiles and rating transition probabilities of banks and financial service providers across the US, Europe, Asia-Pacific and Emerging Markets.

To determine issuer-specific risk profiles, our purpose-built financial model analyses more than 250 data variables daily including solvency ratios, capital requirements, profitability and efficiency ratios.

Looking at credit risk across all rating classes, 18% of banks and financial service providers currently show a high probability of a rating upgrade and 14% are at significant risk of downgrade in the next 12 months. However, Falling Angels are likely to outnumber Rising Stars: our Scorable Rating Transition model currently indicates a high downgrade probability for 15 BBB or BBB- rated financial issuers, whereas 9 issuers with BB or BB+ rating are likely to be upgraded in the coming year.

Scorable’s latest universe expansion brings the total number of corporate and financial issuers analyzed to more than 3,300 worldwide.

MEAG adopts BondIT’s Explainable-AI Technology to accelerate digitization of credit risk management

Munich/Berlin/Israel, 14 December 2021 – MEAG and BondIT, a provider of next-gen fixed income technology, are collaborating to digitize MEAG’s credit risk workflows. The asset manager will use BondIT’s Scorable Credit Analytics to improve its credit research process. Scorable leverages Machine Learning and Explainable-AI (XAI) to predict changes in the credit risk profiles and rating transition probabilities of more than 3,000 corporate and financial issuers worldwide.

“Working with BondIT is another important step in driving technological progress across our organization. We aim to continuously increase the quality and efficiency of our investment process, and technology plays a crucial part in this”, says Prashant Sharma, CIO Public Markets at MEAG.

Heiderose Briem, Head of Business Management: “We opted for Scorable because of its innovative technology, its transparent non-biased AI approach and the easy implementation to get an additional opinion to the inhouse model.”

MEAG’s Global Credit Research Teams in Munich and New York will use Scorable to broaden their research capacity and to improve their decisions in analyzing and managing their credit exposures through today’s volatile market environments. Recognizing and understanding market dynamics early on is crucial for MEAG’s investment performance.

“Better data drives better performance but translating the ever-growing amount of raw data into actionable insights can put a huge strain on resources. This is where our Explainable-AI can offer real added value in supporting analysts and asset managers in their investment decision-making”, says Oliver Kroll, Co-Founder Scorable & BondIT Head of Europe. “We look forward to working with MEAG and to helping them optimize their credit risk management”.

Scorable Credit Analytics is part of BondIT’s fixed income technology solutions portfolio. As a highly client-led organization, BondIT collaborates closely with its partners to help them leverage and analyze their data.

Scorable analyzes more than 250 data variables daily and translates raw data from a vast array of sources, including financial statements, fundamentals and capital market data into actionable insights for investors, helping them identify investment opportunities and risks ahead of the market. Unlike obscure black-box solutions, Scorable’s XAI approach supports transparency and allows users to understand the drivers behind the risk assessments. Scorable’s advanced technology and models are continuously enhanced and updated to reflect the latest market developments.

About BondIT
BondIT provides next generation front office investment technology. We combine Data Science, Explainable-AI (XAI) and Advanced Technologies with Fixed Income investment know-how to improve the performance, accuracy and efficiency of our clients’ investment processes and businesses. Our technology enables clients to efficiently build, analyze and rebalance investment portfolios, and achieve within minutes what previously took hours or days. Thanks to BondIT’s predictive credit analytics, investors can anticipate changes in corporate credit risk and capitalise on investment opportunities ahead of the market. The platform is highly flexible, being data agnostic and API or cloud based, and allows for the seamless onboarding of internal models as well as downstream connectivity to existing portfolio management and trading systems. BondIT is privately owned and paving the way for financial institutions of all sizes to integrate the power of greater technology in their investment processes. For more information, please visit www.bonditglobal.com.

About MEAG
MEAG is the asset manager of Munich Re and ERGO. With offices in Europe, Asia and North America, it also offers its extensive know-how to institutional investors and private clients from outside Munich Re Group. MEAG currently manages assets to the value of around €339 billion, €65 billion of which for institutional investors and private clients from outside the company group.

Appointment accelerates FinTech BondIT’s growth plans to serve asset managers’ and asset owners’ growing technology needs through portfolio management & research-as-a-service.

Herzliya, Israel & London, UK 1 June 2021 – BondIT, a market leading provider of next generation asset and wealth management technology, has appointed Dr David Curtis as Partner and Head of Global Client Business. In this position, Curtis will spearhead BondIT’s client expansion globally to meet the growing demand from asset managers, advisors and asset owners for technology which generates greater speed, increased accuracy and lower cost in asset and risk management.

Curtis joins BondIT after 16 years at Goldman Sachs Asset Management, where he headed the firm’s UK Institutional Business. Prior to this, he was Head of UK Retail at Merrill Lynch Investment Managers (now BlackRock) after several years in Systematic Fixed Income, FX, Derivative and Commodity Trading at Dresdner Kleinwort Benson.

BondIT’s fully integrated portfolio management and research-as-a-service solution enables portfolio managers, advisors and asset owners to automate and optimise fixed-income research, portfolio construction and management. It empowers asset managers to create, analyse and rebalance investment portfolios in real time, leveraging AI and utilising machine learning to accurately anticipate changes in credit risk and find investment opportunities ahead of the market.

Etai Ravid, CEO of BondIT said: “David’s experience and in-depth understanding of the asset management industry will be invaluable as we support our clients’ increasing technology needs with the integration of greater digitisation into their investment processes. David’s appointment adds to our highly skilled technology and client teams in Israel, the US, Germany and Australia, and strengthens BondIT’s capabilities to serve our clients globally.”

David Curtis, Partner and Head of Global Client Business at BondIT, added: “Having worked in asset management and capital markets throughout my career, I see an exponential need for asset managers to innovate, differentiate and find efficiencies to counter the competition and margin pressures that they face. I’m excited to join BondIT at this important time to accelerate technology adoption across an industry that has lagged many others. There is huge potential for growth – the fixed income and credit markets alone represent a $100 trillion+ opportunity and the way in which risk is analysed often relies on fairly inefficient systems. In the UK, a key centre of the $89 trillion asset management industry, we have an incredibly exciting opportunity to develop rapidly over the coming years.”

BondIT is backed by a number of leading investment firms, including Fosun and Talanx, a major European insurance group whose brands include HDI and Hannover Re. Earlier this year, BondIT announced that it had been selected to participate in BNY Mellon’s Accelerator Program to create next generation technology for their advisory businesses.

About BondIT

BondIT Global provides next generation fixed income technology. Its scalable technology platform leverages machine learning and data science techniques, empowering asset managers and financial advisors to automate and optimise their fixed income portfolio construction, management and research. Thanks to the integration of Scorable’s credit research in 2020, investors can anticipate changes in corporate credit risk and capitalise on investment opportunities ahead of the market. The platform is highly flexible, being data agnostic and API or cloud based, and allows for the seamless onboarding of internal models as well as downstream connectivity to existing portfolio management and trading systems. BondIT is privately owned and paving the way for financial institutions of all sizes to integrate the power of greater technology in their investment processes. For more information, please visit www.bonditglobal.com.

BondIT, an independent provider of fixed income technology, has been selected to take part in BNY Mellon’s Accelerator Program. The program works with innovative technology companies to create cutting-edge solutions that support BNY Mellon’s clients and the global financial industry.

 

During the six-month project, BondIT will collaborate with professionals across BNY Mellon to create next-generation technology for advisory businesses, helping them to automate crucial parts of the investment process and to mass customize their services.

 

“We look forward to working with BNY Mellon to develop new digital solutions for their clients. Being selected to this Accelerator is a testament to the relevance of our technology for the financial advisor community” said Etai Ravid, CEO of BondIT Global. “Smart technologies are more important than ever to help advisors provide customized products and superior client engagement, while increasing efficiency and scale.”

 

“BNY Mellon’s Accelerator Program seeks out the best and brightest technology companies to build the most innovative solutions,” said Adam Levine, Co-Head of Digital Partnerships and Co-Founder of BNY Mellon’s Accelerator Program. “We are delighted to have BondIT on board and to collaborate with them to create world-class technology for our clients and our communities.”

 

BondIT has developed a unique platform to automate and optimize fixed-income portfolio construction, management and research. With BondIT’s scalable technology, financial advisors can generate dynamic portfolio proposals in real time, swiftly optimize portfolios and provide clients with detailed analytics and reporting. The platform leverages explainable AI across the entire portfolio lifecycle, empowering users to anticipate changes in credit risk and spot investment opportunities ahead of the market.

 

As part of the accelerator project, BondIT will further refine its technology and add new features, including live pricing and liquidity data, to its platform.

 

About BondIT

BondIT Global provides next-generation fixed income technology. Our scalable technology platform leverages machine learning and data science techniques, empowering portfolio managers and financial advisors to automate and optimize their fixed income portfolio construction, management and research processes. Thanks to the integration of Scorable’s credit research platform in 2020, investors can anticipate changes in corporate credit risk and spot investment opportunities ahead of the market. The platform allows for the seamless onboarding of internal models as well as downstream connectivity to existing portfolio management and trading systems. BondIT is privately owned and data-agnostic, paving the way for financial institutions of all sizes to integrate via APIs and power their investment technologies. For more information, please visit www.bonditglobal.com.

Herzliya/Berlin, 11 February 2021 — bondIT, an independent portfolio construction technology provider for fixed income, and Scorable, a provider of AI-driven credit analysis, have announced the closure of their merger deal. Through the deal, the newly merged company will operate under the name bondIT Global with a 50-strong team based across offices in Tel Aviv, Berlin, New York and Brisbane, Australia.

bondIT Global combines portfolio construction technology and AI-driven credit analysis to offer a fully integrated portfolio management and research as a service solution. The technology enables fixed income asset managers and financial advisors to automate and optimize the investment process, allowing users to build and analyze portfolios within minutes rather than hours or days.

The merger will enhance bondIT Global’s geographic reach and customer base, putting the combined company in an optimal position to target the $80 trillion global asset management market. The total investment in bondIT Global amounts to more than $40 million.

By Bob Guzman, Oliver Kroll & Dan Taylor

2020 was a challenging year for the asset management industry. The outbreak of Covid-19 intensified existing headwinds, which included increased competition, fee compression and rising client expectations. As the year drew to a close, news about the impending roll-out of vaccines fueled optimism across global markets. However, with Covid-19 cases still on the rise, timing of full vaccine deployment and further fiscal stimulus unknown, a challenging market environment is likely to prevail at least for the first half of 2021.

For asset managers, the impact of the pandemic accelerated the need to transform business models and processes to deal with the demanding environment. Despite Covid-19 presenting an opportunity for active managers to demonstrate their ability to navigate extreme volatility better than their passive peers, research demonstrates that only one third of active fixed income funds outperformed their benchmarks during the critical first six months of 2020.

Passive investing continues to gain ground as more and more investors choose the certainty of market returns at very low cost over the uncertainty and volatility of active returns at higher fees. The growing popularity of passive & systematic strategies continues to pressure fees for active management, aggravated further by a persistent low yield environment. But active managers are holding their ground by taking steps to boost their competitiveness in the market – investing in new skills, new technologies and new product strategies. Today’s informed customers expect demonstrable value for money delivered through innovative products and solutions.

In 2021, we expect a continuation of this trend as successful asset managers expand their efforts to pursue scale and differentiation. Many firms are attempting to achieve scale and leverage their cost base by merging with, or acquiring, competitors. Last year saw several high-profile deals across the industry, and this consolidation is likely to accelerate in 2021. However, we also expect an increased push for organic growth as many asset managers attempt to optimize performance and efficiency by applying technology to processes that enhance their human productivity in both portfolio management and research.

To stay competitive, intelligent automation is necessary and can be achieved through advanced technology and AI, providing a solution that enables automization and optimization of investment processes. With the right tools, large amounts of data can also be transformed into useful intelligence and allow asset managers to quickly adapt to a changing industry.

Going forward, the merging of data and digitization of firms’ human intellectual property will play a key role in not only helping asset managers accomplish their scale goals, but also improving efficiency and the ability to meet client objectives. By using smart technologies, asset managers can optimize critical parts of the investment process and systematize their strategies, which subsequently enables the creation of tailored investment solutions more aligned with specific client requirements.

Technology will not replace the asset manager anytime soon, but it is already changing the industry in ways that are differentiating early adopters of innovative technology from its skeptics. It is our firm view that the gap between the pioneers and the laggards will continue to widen, and the latter will most likely struggle to remain competitive in 2021 and beyond.