Credit surveillance that reads every held issuer every day and turns early warning signals into one cited watch case
Every held issuer read every day, and each warning becomes a cited watch case.
See one case, screen by screen ↓Credit Surveillance is a credit early warning system for buy-side credit teams: eight agents read every held issuer's filings, rating actions, prices, news and court dockets every day, in the language each is published, and trip a tripwire when a house rule is crossed. Weak signals from different sources become one watch case, sized in every fund, with a drafted hold-or-reduce note where every sentence is cited. The analyst sets the credit view, the portfolio manager decides the trade and a second person on the desk releases the orders.
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Portfolio credit monitoring on a buy-side book is thin by design. A credit team holds thousands of issuers and each analyst covers 30 to 80 of them, so between quarters the watch is terminal alerts, rating-agency emails and memory. The early warning signals arrive scattered: an 8-K filed after hours saying the CFO has resigned, a court notice about a subsidiary abroad, in its own language, a bond that widens while its sector does not. Each one reaches a different screen, or no one.
A growing share of defaults now arrive as distressed exchanges and liability management exercises, which reward the creditor who reads first. When a guarantor's court case is caught only once the press reports it, or three weak signals never meet in one place, the position is sold after the price has moved. And when a fund board, a money market fund's Rule 2a-7 file or an SEC exam asks who knew what, and when, the record is rebuilt by hand from email and chat.
Estimated split for one watch case on a high yield issuer, by hand and with the solution, in hours.
Eight agents read, check and correlate every held issuer daily; the analyst sets the view, the PM trades.
Tuesday, October 20, 2026, London. Quillfield Capital holds 2,486 issuers across 318 funds and mandates. Overnight, three warning signs land on one of them: Sorel Distribution SAS, a French high yield issuer held in four funds. Here is what happens next, screen by screen, in the working solution. Times are London time.
Camille covers 64 issuers. Her morning screen shows 2,486 held issuers read overnight, 14 open watch cases with $166.2M on watch across 35 funds, and what needs her first: Sorel Distribution, three wires overnight, view due 8:12 a.m. Beside it, what the agents did since 6:00 p.m., every line cited, and a box to ask them anything.
“Read 15,214 items overnight: filings, ratings, news, court notices and lender reports; 4,377 not in English.”
Every held issuer is a row and eight tripwires are columns: spread, rating, covenant, court, auditor, management, late filing and restructuring. Replay last night and Sorel's wires light in turn: Management at 2:51 a.m., when the Filings agent reads Sorel Brands' 8-K Item 5.02 on the Group CFO's resignation; Court at 5:44 a.m.; Spread at 6:05 a.m., when the 2029 secured notes widen 45 bp against a 3 bp move in the sector. The row slides up into the open watch cases.
A watch case opens on two wires within ten days, or one red wire.
The Lyon commercial court has opened safeguard proceedings for Sorel Logistique SAS. The Docket agent reads the judgment in French and keeps the original beside the English. It matches registry number RCS Lyon 812 447 309 to Schedule I of the indenture, where Sorel Logistique guarantees both notes Quillfield holds, and finds it is 23.0% of group EBITDA (€41.2M of €179.0M). Creditors have two months from BODACC publication to declare their claims, plus two more for a creditor outside metropolitan France; the trustee is in New York, so about four months.
The Docket agent never declares a default; the legal reading goes to the workout specialist.
The Challenger agent opens every cited page, re-runs the registry match with a second method, back-translates the French and confirms the CFO also signs Sorel Distribution's compliance certificates. It removes a news story about Sorel Industries in Montreal, a different company. Overnight it removed 11 signals, each with its reason, all listed on the sources screen.
“Removed: news about Sorel Industries (Montreal).”
With three checked wires in 3 hours 14 minutes, the Correlator agent opens WC-2026-0418: €8.0M nominal (€7.42M at market, about $8.05M) in four funds. Camille covers Sorel, so it is hers; three wires means Tomás Reyes and Helen Vasquez are told at once. Her view is due 8:12 a.m. and the trade decision 10:12 a.m. Two minutes later the Note agent drafts a Reduce note: sell €5.0M, keep €3.0M of the secured notes in the European High Yield Fund.
Note agent: “One legal question I have not answered: under §6.01(a)(8) a guarantor’s safeguard may be an Event of Default. That is for Owen Brannigan and counsel.”
Camille asks in plain words, in the case. The Docket agent answers at 90% confidence, with its sources: §6.01(a)(8) covers a voluntary proceeding of any guarantor or significant subsidiary, and the definition includes Book VI of the French Code de commerce. Sorel Logistique is a guarantor and 23% of EBITDA. Whether safeguard is a “voluntary case” and whether holders accelerate are questions for workout and counsel.
Docket agent: “I have not concluded.”
What happened overnight, why it matters, and what each fund's guidelines say. The European High Yield Fund and Global Credit Opportunities have no rating floor; the Multi-Asset Income Fund's high yield sleeve holds issuers rated B+ or higher and reduces a holding that falls below, normally within 60 days, and the Calder Valley Teachers' Pension mandate must sell below B+ within 30 days. Recovery and liquidity figures sit under “Estimates (marked, not facts)”.
The agents propose; the view is hers. Camille sets the internal rating from B+ to B, outlook negative, recommendation Reduce, with reason code V1, fundamental deterioration confirmed. Her signature, role and time go to the audit trail, the research management system shows B, negative, and the case moves to the PM.
“Signed as Camille Ashby · Credit Analyst · 6:41 a.m. London · recorded on the audit trail.”
Tomás sees the four orders the note proposes, one per fund, OMS-77310 to OMS-77313. He approves reducing €5.0M with reason code T1, “Reduce as the note proposes”, after the pre-trade compliance check. The orders are staged in the order management system for the European credit desk. He cannot change the credit view, and he cannot release his own orders.
“Orders are staged in the order management system for the European credit desk. The agents never send an order to the market.”
Priya checks each staged order against the signed decision and releases all four with reason code K1. She cannot change a size. The case moves to Monitoring, the legal question waits for Owen Brannigan, and Owen tracks the claim window. From the second warning sign to the PM's decision: 1 hour 46 minutes.
“Released by Priya Natarajan at 7:36 a.m., a different person from the PM who decided.”
The same Sorel watch case, seen by five of the people who carry it: what their morning looked like, and what it looks like now.
Eight agents read, check and correlate every held issuer daily; the analyst sets the view, the PM trades.
Reads SEC filings, municipal disclosures and regulated filings abroad in their own language, and trips the management, auditor, late filing (NT 10-K, NT 10-Q) and covenant wires under the asset-class rules.
Reads court dockets, registries and insolvency portals in their own language, matches each debtor by registry number to the held issuer's legal-entity tree and guarantor schedule, and sets the legal deadlines.
Reads rating actions, outlooks and watches and compares them with the internal rating.
Watches prices and spreads against the sector and peers under the asset-class rule.
Reads news in each source's language, removes repeats, separates confirmed facts from reports, and trips the restructuring wire on adviser hires, exchange offers and consent solicitations.
Rechecks the other agents: opens every cited page, re-runs every entity match with a second method and back-translates key terms. Removes or flags what does not hold up, with a reason code.
Ties signals into one watch case under the case rule, sizes the position in every fund from portfolio accounting, assigns the covering analyst, starts the clocks and escalates by the rota.
Drafts the hold-or-reduce note with every sentence cited and each fund's guideline consequences, and drafts the watchlist committee pack and Rule 2a-7 reassessment memos.
View, trade, release, check, legal. The agents propose; a named person decides.
The home screen, the tripwire matrix and every watch case, source and note have a box to ask or instruct the agents. Answers come from the agent that did the work, with its sources and its confidence.
Why did Sorel open a case?
Three wires in 3 hours 14 minutes: the Group CFO resigned (8-K, 2:48 a.m.), a Lyon court opened safeguard for a guarantor, and the secured notes widened 45 bp against a 3 bp sector.
What did the Challenger agent remove?
11 signals overnight: 7 named a different company, for example Sorel Industries in Montreal, 3 repeated a story already counted, and 1 was a stale price from a single dealer. Each removal has a reason code on the audit trail.
Is this an Event of Default?
Possibly. §6.01(a)(8) covers a voluntary proceeding of “any Guarantor or any Significant Subsidiary” under a Bankruptcy Law, and the definition includes Book VI of the French Code de commerce. Sorel Logistique is a guarantor and 23% of EBITDA. I have not concluded: whether safeguard is a “voluntary case” and whether the trustee or 25% of holders accelerate are questions for Owen Brannigan and counsel.
Can we sell €5.0M today?
Three dealers quote the 2029 notes with about €2–3M bid each. €5.0M is likely to take one to two days without moving the price much further. That is an estimate; the desk decides how to work the orders.
13 screens from the working solution, on its sample data. Pick one to see it large.
One set of eight tripwires, from spread and rating moves to covenant monitoring on maintenance and springing tests, tuned for investment grade, high yield, leveraged loans, emerging markets, municipals and structured credit. Every change to these credit risk monitoring rules is back-tested on the last 90 days, approved and on the audit trail.
| Setting | Default | Choose from |
|---|---|---|
| Spread widening, high yield | +35 bp in 2 days and 25 bp more than the sector, or +75 bp in 10 days | Investment grade +25 bp in 5 days and 15 bp over the sector · Leveraged loans down 2 points in 5 days · Emerging markets +60 bp · Municipals +30 bp · Structured +40 bp |
| Court filing | Proceeding at the issuer (red); at a guarantor or subsidiary over 10% of EBITDA (amber) | Municipals: Chapter 9 or receivership · Emerging markets: any judicial or out-of-court reorganization · Structured: servicer or originator insolvency |
| Covenant headroom, high yield | Under 15% on a maintenance or springing test, or any waiver | Municipals: rate or days-cash covenant under 15% · Structured: OC or IC test cushion under 1% |
| When a watch case opens | Two wires within ten days, or one red wire | Three or more wires tell the PM and credit risk at once |
| Analyst view due | 2 hours in market hours | If missed: Head of Credit Research |
| PM decision due | 4 hours after the view | If missed: CIO, Fixed Income |
| Agent readings act alone at | 92% confidence | Below it, a person confirms before any use |
| Where data is kept, and for how long | Region of the issuer, 7 years; legal hold overrides | EU region (Frankfurt) · US region (Virginia) · Singapore region |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (a major rating agency’s default study, May 2025: distressed exchanges 68% of defaults year to date in April 2025 · a credit research firm’s count, cited in a law firm’s February 2026 outlook: 47 liability management exercises in 2025, 37 with an uptier element · a rating agency study, 2020: 50–60% of corporate ratings on negative outlook or watch see a further downgrade within 12 months; analysts covering 30–80 issuers, from our division research; SEC Rule 2a-7; Form 8-K Item 5.02; French Code de commerce, Book VI, and BODACC publication for the claim window). Amounts are shown as the working solution shows them, in euros for a euro issuer with the US dollar equivalent. People, firms, funds, issuers and securities named on this page are fictional — characters and sample data in the working solution.
Credit Surveillance is a credit early warning system for buy-side credit teams: eight agents read every held issuer's filings, rating actions, prices, news and court dockets every day, in the language each is published, and trip a tripwire when a house rule is crossed. Weak signals from different sources become one watch case, sized in every fund, with a drafted hold-or-reduce note where every sentence is cited. The analyst sets the credit view, the portfolio manager decides the trade and a second person on the desk releases the orders.
In Credit Surveillance, each held issuer is read every day against eight tripwires: spread, rating, covenant, court, auditor, management, late filing and restructuring, each tuned per asset class. A watch case opens on two wires within ten days, or one red wire, and three or more wires tell the PM and the Head of Credit Risk at once. In the demo, the case opened 28 minutes after the second warning sign.
Yes. Issuer monitoring runs in the language each source is published. In the demo night the agents read 15,214 items in 17 languages, 4,377 of them not in English. Each source is kept in the original beside the English, the Challenger agent back-translates key terms to check the reading, and a reading under 92% confidence goes to a person.
The Docket agent matches the debtor by registry number to the issuer's legal-entity tree and the guarantor schedule in the indenture, then says which notes it touches. In the demo it matched a Lyon safeguard judgment to Schedule I, where the subsidiary guarantees both notes held, and set the claim window from BODACC publication. It never declares a default; that question goes to the workout specialist and counsel.
The Correlator agent opens a watch case, assigns the covering analyst from the coverage list and starts the clocks: the analyst view within 2 market hours, the PM decision within 4 hours of the view, escalating to the Head of Credit Research and then the CIO of Fixed Income if a clock runs out. The Note agent drafts the weekly watchlist committee pack from the cases for the Head of Credit Research to approve and send.
Yes. When a money market fund holding goes on watch, the exposure screen shows the reassessment due, and the Note agent drafts the minimal credit risk reassessment for the analyst and the Head of Credit Risk to sign. In the demo, $12.0M face of commercial paper in the prime money market fund is on watch with a reassessment due October 23.
Yes. The agents read, check, correlate and draft; they never set a view, change a rating, decide a trade, send an order, declare a default or close a case. Orders are staged only on the PM’s signed decision. The analyst signs the view with a reason code, the PM decides the trade, the desk releases the orders, and closing a case needs a proposer and a different checker.
The Agentic Solution Engine builds and deploys it from your requirements and documents, and it goes live once every quality gate has passed. In the working solution, first-time setup has seven steps: connect holdings, match legal entities, sources and languages, coverage, tripwire rules, the escalation rota and a dry run on your history, with go-live approved by the Head of Credit Risk.
Every credit question answered in minutes, each sentence pinned to its tranche and page.
1-min demoBond Covenant AnalysisEvery basket in dollars and every leakage route found, before books close.
1-min demoProspectus ReviewEvery deal that fits a fund briefed and decided before books close, every line cited.
1-min demoWe'll run Credit Surveillance on your own holdings, coverage list and a sample of past warning signs.