INTL FCStone Inc. (NASDAQ:INTL), a global financial services group, has entered the US-asset backed securities (ABS) market, strengthening the focus and scope of its execution and advisory services suite, according to an INTL FCStone Inc. statement.
The latest entry into the US’ ABS market is a big move for INTL FCStone, given the latitude and overall size of the securities market in one of the largest economic blocs. Previously, INTL FCStone had been trading ABS in South America, and specifically Argentina, for several years. Its foray into the US market is led by its subsidiary the Rates Group.
Consequently, INTL FCStone will maintain an initial focus on highly rated credit cards, automobile and equipment securities, part of its overall ABS suite. However, as part of the Rates Group’s overall strategy for its existing fixed income securities, INTL FCStone Financial Inc. will also dedicate capital and balance sheet to to high liquidity clients and inventory in secondary ABS.
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According to Charles M. Lyon, Head of the Broker-Dealer Division of INTL FCStone Financial Inc., in a recent statement on the entry into the US market: “We are proud to now offer our institutional clients access to asset-backed securities, while continuing to provide high value and specialized trading solutions for this unique marketplace. Our clients turn to us for insight, execution efficiency and liquidity, and we developed this particular ABS solution as a direct result of their input.”
“With this roll-out, we have expanded our offerings and diversified our business lines which we believe will provide a much-needed service to our clients. We intend to provide the same high-touch service and specialist expertise for asset-backed securities as we do for our other fixed income products. We look forward to exceeding our clients’ expectations in the ABS market,” he added.
Earlier this month, INTL FCStone Inc. reported its Q1 2015 operating metrics ending December 31, 2015, which were notably lower QoQ. During Q1 2016, INTL FCStone reported its total revenues of just $151.3 million, which represented a sizable decline of -15.3% QoQ from $178.7 million in Q4 2015.