Process enables bank to execute loan trade settlements faster, more efficiently

The new automated data collection process improves accuracy and reduces manual work

The U.S. Bank Global Corporate Trust group is continuing its investments in technology and as its next step in this technology transformation, it recently adopted a new process for automating the settlement of loan trades for collateralized loan obligations clients. U.S. Bank clients are expected to benefit from faster, smoother and more accurate trade processing for these assets.

In collateralized loan obligations, known as CLOs, an asset manager pools together collections of loans, typically syndicated bank loans, which are commercial loans provided to a borrower by a group of lenders rather than a single lender.

“CLOs are actively managed, with daily settlements of loan trades,” said Hosni Shadid, global head of CLO and alternatives for U.S. Bank. “Once trades are executed, we, as a CLO trustee, update our system of record with details about what loan facilities are bought or sold, and facilitate execution of the cash transactions associated with the settlement.”

Previously, U.S. Bank received batched trade settlement PDF documents and the bank would use software to scrape the information from those documents and enter it into the system of record, Shadid said. Under the new process, the bank receives trade data directly from S&P Global Market Intelligence’s ClearPar system and can then integrate it directly with downstream platforms.

“This streamlines how we process complicated trades, improves accuracy, creates further automation and makes our role in settlements more efficient,” Shadid said. “Our clients benefit greatly from this streamlined experience.”

With U.S. Bank being recognized as the leading CLO trustee by multiple industry organizations, the new process will be used with a high volume of trades, said Brian Schott, CLO deal administration continuous improvement leader.

“We receive thousands of trades each day, averaging $1.2 billion in cash movement,” Schott said. “Being able to load data faster allows us to operate in more of a real-time environment.”

The new process is being implemented in phases. The first phase, being implemented now, covers the cash transactions associated with the trade settlements. Additional phases covering data records and reconciliation are expected to be complete in 2026, Shadid said.

“This is one of the most critical functions we perform for our clients,” he said. “It’s extremely important and we’re committed to investing in enhancements that create efficiencies and enhance the client experience.”