Interactive Data to Provide Valuations for TALF Loans

Interactive Data Corporation (NYSE: IDC), a leading provider of financial market data, analytics and related solutions, today announced that its Pricing and Reference Data business will offer Prism’s valuations for loans made available by the Federal Reserve Bank of New York in connection with the Term Asset-Backed Securities Loan Facility (TALF). Through an exclusive agreement with Prism Valuation, Interactive Data is able to offer valuations for TALF loans, along with other complex financial instruments such as OTC derivatives and structured products.

The TALF loan valuation process takes into account the value and assumptions of the underlying asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS) collateral, the terms of the loan, and the value of the theoretical put option embedded in the loan. Borrowers under the TALF program must value both the TALF-eligible securities and liabilities (TALF loans) for financial reporting purposes. Interactive Data already offers independent evaluations for the underlying TALF-eligible ABS and CMBS. In collaboration with Prism Valuation, Interactive Data now offers valuations for TALF loans.

“We have observed that an increasing number of our clients — mutual funds, institutional asset managers, insurance companies and hedge funds — are taking advantage of the unique investment opportunities resulting from the TALF program,” said Liz Duggan, managing director, Evaluations, Interactive Data. “A valuation provider needs a comprehensive understanding of these hard-to-value instruments, including the optionality embedded within the loans. We have collaborated with Prism Valuation to provide our clients with valuations that reflect the unique characteristics of TALF loans.”

“Under financial reporting standards, many financial institutions that choose to borrow under the TALF program will value these loans at fair value,” said Dushyant Shahrawat, senior research area director for TowerGroup. “Data providers like Interactive Data (and their solutions) can fill a unique industry need by providing valuation information for these loans that is not otherwise available in the industry.”

Interactive Data is also hosting a webcast on Tuesday, October 6 at 11 a.m. ET to discuss the TALF program and related valuation topics. Rob Haddad, director of Evaluated Services for Interactive Data and Keldon Drudge, chief technical officer for Prism Valuation, will host the webcast. Click here to register.

As background information, the TALF was launched in March 2009 and was designed to increase credit availability and stimulate the securitization markets by providing up to $200 billion in loans to finance the purchase of eligible new, and certain legacy, highly-rated securities that are backed by, for example, auto loans, credit card receivables, small business loans, student loans, and commercial mortgage loans.

According to the terms of a TALF loan, interest and principal cash flows from the collateral are directly applied to the interest and principal payments owed under the loan. In the event that the cash flows from the collateral are not sufficient to service the cash flows due on the loan, the borrower generally has the ability to surrender the collateral to the Federal Reserve Bank of New York with no additional liability. This feature generally provides the borrower with the economic equivalent of an American-style put option.

About Interactive Data Corporation

Interactive Data Corporation (NYSE: IDC) is a leading global provider of financial market data, analytics and related solutions to financial institutions, active traders and individual investors. The Company's businesses supply real-time market data, time-sensitive pricing, evaluations and reference data for millions of securities traded around the world, including hard-to-value instruments. Many of the world's best-known financial service and software companies subscribe to the Company's services in support of their trading, analysis, portfolio management and valuation activities. Interactive Data, headquartered in Bedford, Mass., has approximately 2,400 employees in offices located throughout North America, Europe, Asia and Australia. Pearson plc (NYSE: PSO; LSE: PSON), an international media company, whose businesses include the Financial Times Group, Pearson Education, and the Penguin Group, is Interactive Data Corporation's majority stockholder.

Interactive Data’s Pricing and Reference Data business provides global securities pricing, evaluations and reference data designed to support financial institutions’ and investment funds' pricing activities, securities operations, research and portfolio management. Interactive Data collects, edits, maintains and delivers data on more than 6 million securities, including daily evaluations for approximately 2.8 million fixed income and international equity issues. Interactive Data specializes in ‘hard-to-get’ information and evaluates many ‘hard-to value’ instruments.

Pricing, evaluations and reference data are provided in the U.S. through Interactive Data Pricing and Reference Data, Inc. and internationally through Interactive Data (Europe) Ltd. and Interactive Data (Australia) Pty Ltd.

For more information about Interactive Data Corporation and its businesses, please visit www.interactivedata.com

Interactive DataSM and the Interactive Data logo are service marks of Interactive Data Corporation.

About Prism Valuation

Founded in 2006, Prism Valuation provides services that replicate the pricing and risk analysis capabilities of a structured products dealer, with an emphasis on hard-to-value assets. Their valuation philosophy is built on three pillars “People – Data – Models.” Using this foundation, Prism Valuation’s quantitative analysts develop and extensively test appropriate structured product valuation engines. For more information about Prism Valuation please visit www.prismvaluation.com.

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