the requirement for custodians to process increased volumes of a relatively new asset class, secondary loans, during the past two years with no real systems in place has meant that most of the work is undertaken by telephone and fax with settlement times as high as T+30 (trade date plus 30 days).
The emergence of this new asset class of corporate loans originated by commercial banks and similar private debt began when banks started offloading some of their loans from their balance sheets as collateral to repurchase agreement (repo) transactions. The market in secondary loans has seen rapid growth in the past three years.
