For the second year running CreditTrade wins this award for its interdealer platform, which offers transaction services along with credit data, information and analytics.
CreditTrade gains an edge by being active in multiple credit markets such as loans, structured products and credit derivatives. It also offers an attractive hybrid model of voice-based and electronic trading.
Bobby Console-Verma, head of loans at CreditTrade, says that the mix of products on the platform works to the site’s and users’ advantage. “People are now trading credit as an entity as opposed to a discrete product,” he says. “Synergies allow a trader to make a call on where the spread should be.”
Although market participants agree that loan trading will eventually become electronic it has been slow to take off and so CreditTrade’s hybrid model has proven popular. It offers both real-time price discovery and trading in an online, exchange-style environment, but with a dedicated team of voice brokers.
Despite having a small and selected group of users, CreditTrade has the largest ticket flow for loans of the sites viewed in this category, with a year-to-date traded loan volume of $2.88 billion. This is no mean feat given that CreditTrade operates in Europe, which has a less liquid secondary loan market than the US.
The number of users on the site is restricted and consists of 15 investment banks, commercial banks and other financial institutions. The idea is that CreditTrade is open only to professional dealers that are committed to offering firm prices. Console-Verma says: “We don’t allow people to give us prices that aren’t realistic as it skews the bids.”
CreditTrade also developed a loan-pricing calculator in conjunction with the Loan Market Association in 2001.
From the prices screen, users can see not only bid and offer spreads on loans but also market depth. The site will enable users to see if theirs is the best price in the market. Additionally, there is a panic button that enables a dealer to pull or hold prices.
The site has a data warehouse for credit products and is loading up loan data that will be available by the first quarter of 2003.
