Combined data offering builds on DeltaTerra’s existing climate-adjusted credit metrics to help measure the potential change in value of real estate and MBS due to climate risk
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, and DeltaTerra Capital, an investment research and consulting firm focused on climate risk analysis for institutional investors, today announced a collaboration to offer climate-adjusted credit risk analytics for residential and commercial mortgage-backed securities.
The new joint offering integrates ICE’s Physical Climate Risk Data with DeltaTerra’s climate analytics, financial risk models, and market data to deliver risk impact estimates for investors in the residential and commercial mortgage-backed securities markets. By combining key data from both firms, the service offers a climate risk analytics solution that provides insights at the property, loan, deal, and bond levels, which is easily translated into investment analysis.
“Our climate risk data can help inform investment decisions of U.S. municipal and MBS market participants by providing transparency into securities climate risk exposure,” said Evan Kodra, Head of Sustainable Finance R&D at ICE. “We are excited to work with DeltaTerra to offer customers this new joint product that estimates the potential change in value of real estate and mortgage-backed securities directly attributable to physical climate risk, which may not be reflected in market prices.”
ICE’s Physical Risk Climate Data applies geospatial climate, economic, and demographic data to specific U.S. municipalities, MBS pools, and related fixed income securities. The DeltaTerra Klima® suite of climate risk analysis tools provides metrics and reports for securitized credit investors who manage risk in some of the most climate-exposed capital markets, such as RMBS, CMBS, and credit risk transfer securities (CRT). Together, ICE and DeltaTerra’s joint solution translates physical climate risk estimates into financial risk assessments, including asset price depreciation risk and default risk for mortgage-backed securities.
“In our prior roles as asset managers, we saw the need to simplify the translation of hazard risk to bond performance risk to assist market practitioners as they deal with the current state of change,” said David Burt, CEO at DeltaTerra. “The Klima models and analytics are an important toolkit providing transparency into whether markets are adequately factoring in future insurance costs and other climate-related fundamental drivers when buying and selling property, loans, and related securities. The collaboration with ICE can bring these solutions to the market rapidly at scale with a leading climate and market data provider and we could not be more pleased to participate in this joint effort.”
ICE offers a suite of Physical Risk Climate Data, which includes geospatial climate, economic and demographic data to help investors quantify climate risk exposure across municipal bond and MBS portfolios.
For more information on ICE’s Sustainable Finance data offerings, please visit: https://www.ice.com/data-services/sustainable-finance-data
DeltaTerra Capital is an investment research and consulting firm enabling institutional investors to measure and manage financial risks related to climate change. Created by a team of experienced investors, the DeltaTerra Klima™ suite of proprietary models bridges climate science and investment science by translating scientific estimates of physical risk into actionable investment insights.
For more information, please visit https://www.deltaterracapital.com.
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mission-critical workflow tools that increase transparency and operational efficiencies. We operate exchanges, including the New York Stock Exchange, and clearing houses that help people invest, raise capital and manage risk across multiple asset classes. Our comprehensive fixed income data services and execution capabilities provide information, analytics and platforms that help our customers capitalize on opportunities and operate more efficiently. At ICE Mortgage Technology, we are transforming and digitizing the U.S. residential mortgage process, from consumer engagement through loan registration. Together, we transform, streamline and automate industries to connect our customers to opportunity.
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Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 2, 2023.
Category: Fixed Income and Data Services
SOURCE: Intercontinental Exchange