Fixed income credit analysis software – a brief introduction

Sometimes it is asked: What does fixed income credit analysis software do? Why do I need it?

Good questions!  In the past, it has been common for fixed income portfolio management teams to build their own proprietary credit systems.  Others may have used spreadsheets and /or commercial databases to store, retrieve and analyze data.  For many years this entirely adequate.  But credit crises have come and gone, oversight boards and investors require better reporting, and the fixed income investment landscape itslef is considerably more complex than just 10 years ago.  In addition there is a widespread realization that firms should be getting more productivity from technology.  As a result there are long term costs and inefficiencies to consider about the former “free” or “inexpensive” solutions.  These include:

  • Difficulty of cross-spreadsheet comparisons
  • Consistent fielding of like credits within the same sector or industry
  • Undetected spreadsheet error, combined with human error
  • Poor data integrity or security
  • Poor data synchronization or updating
  • Maintaining historical spreadsheets for credit research
  • Large volume of spreadsheets needed to track many credits
  • Ad-hoc processes are often difficult to share with other team members
  • Challenge of passing on existing systems to new employees

Professional grade software – vs. spreadsheets and ad-hoc processes – can provide the following features:

  • Link together credit analysis and portfolio holdings
  • Create a credit data / credit watch / credit research warehouse for the investment or credit team
  • Generate financial ratios and trends for individual credits versus sector peer groups
  • Build your own custom benchmarks to evaluate NRSRO rating trends
  • Locate credit obligors with a change in status
  • Assess the creditworthiness of a trade on the secondary market
  • Create and maintain multi-variate ranking of credit strength and trends, within industry or sector
  • Multi-variate regression for predictive or proxy ratings


Investortools built CreditScope in order to provide these features.

CreditScope – a powerful, efficient credit analysis for fixed income investors

The CreditScope credit analysis software eliminates the limitations of spreadsheet-based systems, while adding features that only specialized software packages can provide. It also provides the advantage of having a resident credit analysis tool.  CreditScope® is robust and powerful enough for NRSROs to use (and many do), but it is also very easy to learn and use for common/routine tasks as well.

CreditScope also includes an optional credit data feature that integrates comprehensive and fresh credit data into the software. Read more about this here.


Investortools credit data and analysis software

Investortools provides powerful credit tools combined with credit data. CreditScope Municipal Edition and CreditScope Corporate Edition each provide optional credit data specific to municipal or corporate credit conventions.  By integrating data with software, credit professionals gain access to powerful analysis and reporting features.