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Capital Markets

Liquidnet beefs up effort to digitize primary bond markets

Liquidnet’s network of asset managers might see big benefits from automating new issue data and workflows from TC Icap’s bank customers.

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While secondary market bond trading is increasingly electronic, new issues are only just beginning to catch up.

Joining Nivaura, Agora, Finsmart and various bank initiatives, Liquidnet, the peer-to-peer network of institutional asset managers that TP Icap acquired in March 2021, is the latest to offer digital tools for debt capital markets

It launched version 1.0 of Liquidnet Primary Markets in September, combining two elements: a workflow tool for buy-side firms to automate and streamline new issue announcements and pricing data; and a new protocol for grey-market trading of new bonds ahead of first settlement date. It is already adding new features.

Underwriters are so used to books always being covered. Maybe not for much longer
Anonymous banker

Liquidnet first moved into fixed income in 2014, when it acquired Vega-Chi, the all-to-all bond trading platform founded by Constantinos Antoniades, a former sell-side dealer at Goldman Sachs and later a hedge fund manager.

Antoniades realized early, as did Rick McVey, chief executive at MarketAxess, that the owners of bonds would have to provide liquidity to each other, as the overall market ballooned while dealers' balance sheets shrank.

That problem of secondary-market illiquidity appeared once again at the end of 2021 as fears over coming interest-rate rises to control inflation pushed up rates volatility and made it tough to price new deals.

Plenty

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