Thomson's American Banker-Bond Buyer Acquires Trepp Information Services

Thomson Corp.'s American Banker-Bond Buyer (AB-BB) subsidiary boosted its presence in the mortgage-backed securities data marketplace with the acquisition of Trepp Information Services Inc. and its Trepp Pricing Services Inc. unit. The purchase is a logical step for AB-BB, which already worked with Trepp to deliver collateralized mortgage obligation (CMO) and real estate mortgage investment conduit (REMIC) prices under a 1987 agreement.

Prior to the acquisition, AB-BB was the leading redistributor of Trepp Information Services' data through its asset-backed securities group. The asset-backed group comprises the Bond Buyer, Almont Analytical and now the Trepp services. The asset-backed group is part of AB-BB's securities group, which also includes the municipal bond data operation of the Bond Buyer and Muller Data Corp., the former Mellon InvestData Corp., which AB-BB acquired last summer (Micro Ticker Report, July 24, 1989). AB-BB also bought Almont Analytical and Finsoft Inc., both providers of analytics software for the asset-backed securities market, last summer (MTR, Aug. 7, 1989).

The Trepp companies were acquired from Richard C. Trepp, president, chief executive officer and former majority shareholder in Trepp Information Services. Trepp will remain president and CEO of Trepp Information Services. Trepp will report to AB-BB executive vice president Joseph V. Riccobono, who heads the securities group.

Under an exclusive arrangement, Trepp Information Services collects on behalf of the Public Securities Association (PSA) prospectus data, tranche factors and price/yield calculations for CMOs, REMICs and other asset-backed securities, and markets them as an online database. Trepp Pricing Services started a monthly CMO/REMIC valuation service in March 1989, using data contributed by 25 mortgage-backed securities dealers (MTR, April 1989).

Terms of the transaction weren't disclosed. It isn't known how much of Trepp Information Services, if any, AB-BB owned prior to the acquisition. But at the time of the companies' 1987 distribution agreement, AB-BB proposed the purchase of a 20 percent stake in Trepp Information Services for $1.5 million, sources say. Under the proposal, AB-BB was to have been granted an option to acquire the balance of the company. In light of last month's purchase, it appears that the option plan may have been in place.

Riccobono declines to discuss AB-BB's previous relationship with Trepp Information Services, categorizing it as "not public information." He says, however, that "there was a working relationship between the two companies prior to the acquisition."

Scott Sprouse, vice president at Trepp Information Services says that to his knowledge AB-BB didn't hold any Trepp stock prior to the latest purchase.

AB-BB senior vice president Carl Vella says that the Trepp services will be offered alongside existing AB-BB asset- backed products. They'll also continue to contribute data to those products, as per the 1987 distribution agreement, with some additions.

The result will be that the Bond Buyer's asset-backed operation will distribute Trepp data in hard-copy, magnetic tape, diskette and microfiche formats; Trepp itself will continue its mainframe-based dialup service; Muller Data will add pricing and factor information on asset-backed securities to its current fixed-income coverage; and Almont Analytical will provide a PC-based service, using its Pool system, an upgrade of AB-BB's Government Securities Management Service (IMD, June 11).

Vella says Almont is now fully merged with Finsoft. He says Almont is currently converting customers of the GSMS, which provided dialup access to AB-BB's databases, to the Pool system.

Trepp, meanwhile, will maintain the distribution agreements it has with other vendors. These include the supply of its CMO Marks & Matrix end-of-day pricing service to Knight- Ridder Inc.'s MoneyCenter.