Trading Edge has entered into an agreement with MBIA-a U.S. financial guarantor of municipal securities-to offer municipal bonds to users of BondLink.
BondLink is an electronic market for high-yield bonds that was launched in April. The deal with MBIA gives Trading Edge the exclusive right to offer MBIA insured municipal bonds electronically in the secondary market, says Murray Finebaum, CEO of TradingEdge. He notes that Trading Edge, however, is permitted to trade issues that are previously insured by any insurer. He adds that Trading Edge and MBIA will jointly market the service-a project that will start in early October. "We, in addition to seeing the traditional investors in that segment, intend to go to electronic brokers and other brokers to see if we can achieve a retail interest in this system, Finebaum says. He adds that he expects to be in that market by the second quarter of next year. Finebaum adds that next up is a plan to offer convertible bonds and emerging markets securities through the system.
Trading Edge is also coming out with a news service in October, which will be integrated into Bondlink. Murray notes that the system will report on Securities and Exchange Commission filings on new issues, company actions and "any regulatory issue that may affect a company." The firm has hired a staff of eight journalists in Washington, D.C., and has hired away the executive editor of Fed Filings to head up the effort. To Finebaum's knowledge, none of the other bond trading systems include a news service. He adds, "News begets transactions," explaining the reasoning behind launching the service as the company is compensated on a transaction basis. There is no added charge for the news service.
He adds that Trading Edge plans to augment the system with convertible notes and emerging markets debt-primiarly euros and Brady bonds in December. Trading Edge has more than 150 institutions as clients and is used on some 400 workstations. As the system matches on an anonymous basis, Finebaum would not disclose any clients. Ira Lehrman will head up the emerging market segment and Finebaum plans to hand over the muni segment to Chris Tuhy, who worked with Finebaum on the deal. The converts and emerging markets debt by year end.