01.20.2016

MTS Expands in European-Denominated Corporates

01.20.2016
Terry Flanagan

MTS Markets International, a unit of London Stock Exchange Group, said it launched European-denominated corporate bond trading on its MTS BondsPro electronic platform.

“The addition of non-USD corporate bonds to our MTS BondsPro platform is in response to customer demand,” Mark Monahan, CEO of MTS Markets, said in a statement.  By giving customers access to a single global liquidity pool for bonds issued by companies both in the U.S. and elsewhere, we are facilitating cross-border flows and widening the network of bonds available.”

“Specifically, there is strong demand for EuroTLX liquidity in the U.S.,” Monahan said, referring to the Milan-based alternative trading system focused on retail-sized fixed income trades. “We look forward to working together with EuroTLX to ascertain how our broker-dealer can assist this prestigious LSEG platform in 2016.”

MTS’s move is the latest market initiative to make it easier for institutional buyers and sellers of bonds to find the other side of trades. Market participants and observers say there is no single solution to the liquidity constraints in credit trading, but incremental enhancements effected by platform operators can serve as pieces to the liquidity puzzle.

Mark Monahan, MTS Markets International

Mark Monahan, MTS

“With bond market liquidity still top of mind for global investors, seamlessly gaining access to foreign issues offers additional methods of expressing credit market views,” said Kevin McPartland, head of research for market structure and technology at Greenwich Associates. “Pursuing this market segment certainly makes strategic sense.”  

MTS BondsPro will handle debt securities issued by U.S.-based multinational companies such as General Motors and AT&T, not denominated in U.S. dollars. These ‘reverse yankee’ bonds comprised more than one quarter of non-financial, investment grade issuance in Europe last year, according to industry data.

BondsPro, which operates as an ‘all to all’ platform, enables more than 600 buy-side and sell-side customers in the U.K., U.S. and Switzerland to trade U.S. corporate and emerging market debt, plus more than 9,000 non-USD CUSIPs in currencies such as the British pound (GBP), euro (EUR), Australian dollar (AUD), and Canadian dollar (CAD).

Underlying the MTS BondsPro platform is web-based HTML 5 technology, which enables login directly via a web browser, and can also access the liquidity pool via FIX 4.4 or through most order management systems.

Featured image by Melpomene/Dollar Photo Club

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