A digital platform for the primary bond market could make issuance easier for corporates seeking to tap this important source of financing.

Increasingly strict industry regulations and manual processes are contributing to the decline in trading in the secondary bond market, which in turn directly affects pricing in the primary bond market. According to Overbond, a Toronto-based company that is bringing the digital revolution to the primary bond market by connecting fixed-income issuers, dealers and investors, the origination and communication processes in the market “have not changed significantly in more than 50 years”.

Direct connection

Earlier this year, Overbond launched Overbond BPS, its platform for primary bond issuance, which provides a direct connection for bond market issuers and dealers. Last week the platform was updated to include full connection for fixed-income investors as well. It is the first fintech entrant into the new bond issuance market. According to the Canadian company, the platform provides “higher transparency, better price discovery, and investor diversification for all counterparties in the primary bond market”.

Digital approach

Vuk Magdelinic, CEO of Overbond, recently stated: “We are the first fintech company focused on bringing the multi-trillion-dollar primary bond market closer to a completely digital approach. While much of the financial services market is embracing digital processes to streamline how they do business, primary bond origination remains one of the few asset classes that still relies on manual processes.”

The company claims that its clients include investment-grade corporate issuers that are looking to better manage their large borrowing programs, some of which include $20 billion in outstanding bonds. It stated: “The treasurers of these organisations are increasingly focused on investor diversification as well as their ability to efficiently discover new bond pricing.”