Overbond Ltd., the first fintech entrant into the new bond issuance market, has launched an end-to-end platform and support framework for primary bond origination.
The fully-digital Overbond platform for primary bond issuance provides higher transparency, better price discovery, and investor diversification for all counterparties in the primary bond market. It is the first fully-integrated platform to connect bond market issuers, dealers, and fixed-income investors.
"We are the first fintech company focused on bringing the multi-trillion-dollar primary bond market closer to a completely digital approach," says Vuk Magdelinic, CEO of Overbond. "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 new digital platform modernizes all aspects of bond origination by providing secure communications, real-time market updates, and custom reporting and analytics, while reducing infrastructure and transaction costs for issuers, dealers, and investors.
Earlier this year the company launched Overbond BPS, a solution that improves issuer-dealer communication and provides advanced market analytics. Today's launch adds another layer of functionality by connecting investors to the network. With the addition of the investor-dealer module, Overbond has achieved its first goal of bringing all bond market participants together on a transparent, secure, and highly efficient cloud-based platform. With the Overbond platform, dealers now have access to digital price discovery tools, while investors have more efficient access to information.
Solving a Decades Long Challenge
The secondary bond market, which directly impacts pricing benchmarks in the primary bond market, has seen a significant reduction in trading volumes in recent years. Factors contributing to this decline include increasingly strict industry regulations and the manual approach used in trading fixed-income securities -- including origination and communication processes that have not changed significantly in more than 50 years.
"Overbond is solving this decades long challenge for the entire primary bond market using a digital approach that brings all stakeholders together so that bond issuance can be digitally facilitated, and benchmark prices can be discovered more efficiently," says Magdelinic.
Founded in 2015, Overbond recently received $7.5-million in seed financing from Morrison Financial Services. The company's growing client base includes investment-grade corporate issuers that are looking to better manage their large borrowing programs, some of which include $20 billion in outstanding bonds. The treasurers of these organizations are increasingly focused on investor diversification as well as their ability to efficiently discover new bond pricing. They are working actively with Overbond to build stronger business relationships and streamline processes.