Some of the main ways in which corporate bonds are traded are:
Direct Issuance: Corporations can also sell bonds directly to investors, usually through investment banks like us. We can help you to issue your corporate bond to finance your projects.
Over-The-Counter (OTC) Trading: The most common way corporate bonds are traded is over-the-counter. This means the trading is done directly between two parties without the oversight of an exchange. Dealers typically act as intermediaries between buyers and sellers.
Electronic Trading Platforms: There are several electronic platforms that facilitate the trading of corporate bonds. These platforms allow for more transparent pricing and quicker execution of trades. Some popular platforms include MarketAxess, Tradeweb, and Bloomberg Terminal.
Broker-Dealers: Broker-dealers can also facilitate the trading of corporate bonds. These firms buy and sell securities on behalf of their clients, but can also trade for their own accounts.
Exchange-Traded Funds (ETFs): Some investors trade corporate bonds indirectly through ETFs. These funds are traded on exchanges, just like stocks, and they allow investors to gain exposure to a diversified portfolio of corporate bonds.
Over the Counter
Most corporate bonds trade in the over-the-counter (OTC) market in the USA. Most bonds trade over-the-counter (OTC), between bond dealers without the use of a centralized exchange. Most European corporate bonds are traded on electronic trading platforms. MarketAxess is one of the leading fixed income electronic trading platforms for institutional investors and dealers. Tradeweb is another electronic trading platform that offers pre-trade data, actionable axes, inventory, and streams for corporate bonds.
There are two types of markets for trading bonds: primary and secondary markets. The primary market is where new bonds are issued and sold to investors for the first time. The secondary market is where previously issued bonds are traded between dealers and investors, including institutions.
Corporate bonds can be bought when they’re issued (on the primary market) and held until maturity, or they can be traded through a broker-dealer (on the secondary market. Bond prices are subject to market forces and often fluctuate above or below par.
The Trade Reporting and Compliance Engine (TRACE) provides real-time price information for corporate bonds and brings transparency to the fixed income market. TRACE helps create a level playing field for all market participants by providing comprehensive, real-time access to bond price information.
Alternative Trading Systems (ATS)
Alternative Trading Systems (ATS) are electronic platforms that allow for the trading of corporate bonds.
ATS platforms can be either
request-for-quote (RFQ). In an RFQ system, dealers provide quotes to clients who then choose to accept or reject the quote.
order-driven. In an order-driven system, buyers and sellers submit orders to the platform, which then matches them based on price and quantity
An alternative trading system (ATS) is a trading venue that is more loosely regulated than an exchange. ATS platforms are often used to match large buy and sell orders among its subscribers.
The most widely used type of ATS in the United States are electronic communication networks (ECNs) - computerized systems that automatically match buy and sell orders for securities in the market. Examples of ATS include dark pools and ECNs. ATS account for much of the liquidity found in publicly traded issues worldwide. They are known as multilateral trading facilities in Europe, ECNs, cross networks, and call networks. Most ATS are registered as broker-dealers.
Regulation ATS establishes a regulatory framework for alternative trading systems. An ATS is a trading system that meets the definition of “exchange” under federal securities laws but is not required to register as a national securities exchange if the ATS operates under the exemption provided under Exchange Act Rule 3a1-1(a). To operate under this exemption, an ATS must comply with the requirements set forth in Rules 300-303 of Regulation ATS. To comply with Regulation ATS, an ATS must, among other things, register as a broker-dealer and file an initial operation report with the Commission on Form ATS before commencing operations.
Our trading partners
In terms of bond trading platforms, some of the best ones available as of 2023 include Saxo Markets, Hargreaves Lansdown, Interactive Investor, and AJ Bell. To get listed in these platforms, please talk with us. These platforms vary in the number of available bonds, dealing commissions, account fees, and other specifics:
Saxo Markets: Offers over 4,500 digitally tradeable government and corporate bonds in various regions including Europe, the US, Asia, Africa, the Middle East, and Latin America.
Hargreaves Lansdown: Also offers over 4,500 bonds
Interactive Investor: Offers a much larger number of bonds, over 10,000
AJ Bell: Offers 1,000 bonds
In the highly competitive and complex world of corporate finance, choosing the right bond issuer can significantly impact the success of your company's bond issuance. International Finance Bank (IFB) is an unrivalled player in this arena, offering a comprehensive suite of services that cater to all your corporate bond needs. Our expertise in the industry, coupled with our robust global network and deep local knowledge, ensures that your corporate bonds are strategically positioned to attract the right investors. We are not just a service provider; we are your strategic partner, committed to delivering value and growth to your business.
At IFB, we understand that no two companies are the same, which is why we offer tailored solutions that align with your unique objectives and risk appetite. Our dedicated team of specialists work closely with you to understand your goals and design a bond issuance strategy that optimizes your cost of capital while maximizing investor appeal. IFB's reputation for transparency, integrity, and superior customer service offers an added layer of assurance for both issuers and investors. By choosing IFB, you are not only gaining a reliable bond issuer but also a trusted ally that will navigate you through the complexities of the bond market. Let us transform your bond issuance process into a strategic advantage for your organization.