ICE to provide ADP workforce data on muni issuers

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Intercontinental Exchange, Inc. is partnering with ADP to launch an alternative data offering for the municipal bond market, linking ADP’s insights around demographics and compensation to specific bond issuers and geographic zones that service debt via ICE Data Services.

ICE Data Services’ background in turning unstructured data into "actionable insights" and ADP’s expertise with workforce data will provide more visibility into the factors impacting the creditworthiness of municipal bonds, including current financial health, future revenue streams, migration trends and macroeconomic conditions for a region, said Lynn Martin, president of fixed income and data services at ICE.

Martin said the data will be complementary to all ICE Data Services’ suite of products and be distributed alongside them. Initially, this data also will be available through the Snowflake Data Marketplace and directly from ICE Data Services. The ADP data will be updated monthly.

“It’s about stitching together data in a consolidated fashion that is easily translated to analyze risk,” said Lynn Martin, president of fixed income and data services at ICE.

“We have a lot of data currently on the debt side of the muni market, but we are always looking to expose the market to alternative data that is available and this is another tool to analyze risk in the municipal space,” Martin said.

She said this is another tool for investors since ADP focuses on macro employment trends, migration trends in and out of geographic locations, especially given how COVID-19 has changed the make up of cities around the country. “It’s about stitching together data in a consolidated fashion that is easily translated to analyze risk.”

Martin said ICE is always looking to expand and include alternative data sources to improve transparency. These and other ventures are meant to provide a way to put these metrics to work

“Due to varying factors including the vast number of issuers, investors have traditionally struggled with transparency and data consistency in the municipal bond markets,” Martin said. “By pairing ADP’s data with ICE’s market leading pricing and reference data, we’re able to provide much more transparency into the tax base and revenues that support municipalities across the country, giving a richer understanding of an issuer’s creditworthiness.”

The companies said the new offering combines ICE Data Services’ expertise in municipal bond pricing and reference data alongside ADP’s aggregated, anonymized and timely HR and compensation data. “This synergy will create analytics to help decisionmakers evaluate the creditworthiness of issuers throughout the U.S.,” a release said.

“The depth and breadth of ADP’s unmatched workforce dataset, from geographic insights into employment to payroll demographic trends over time, will enable ICE to provide greater transparency in this space,” said Jack Berkowitz, senior vice president of product development at ADP in a release. “We continually look to leverage our data in a variety of use cases across industries to help uncover gaps and unlock opportunity, and we are delighted to partner with ICE in bringing to market this truly unique product.”

Martin said ICE Data Services will continue to look for alternative data sources.

In 2020, ICE Data Services partnered with Boston-based risQ to provide analysis of climate risks for municipal bond issuers and incorporate those risks into project and investment decisions. That relationship aims to provide analysis and comparisons from specific municipal securities to entire portfolios as an integrated service with ICE Data Services’ municipal pricing and reference data, offering a tool to “quantitatively measure climate risk in municipal bonds.”

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