The Great Credit Market Makeover

The U.S. corporate bond marketplace has always relied on long-standing counterparty relationships to help market participants find the other side of their trades. More recently, those relationships have benefitted from a network effect as traders embrace electronic trading platforms, seeking new levels of transparency and efficiency in the way they trade credit.

Unlike the past 20 years, which were defined by slow adoption of electronic trading, the current credit landscape is undergoing a dramatic makeover due to new trading technology and significant shifts in market structure.

Growing the liquidity pool

One of the most meaningful changes in the credit market has been the introduction of all-to-all (A2A) trading. With a large amount of U.S. corporate bond inventory being held by buy-side participants, anonymous A2A trading has helped widen the pool of price makers to include the institutional investor community.

这一变化的一个驱动程序是TradeWeb，交易技术的领导者，以及世界上许多最有效的固定收入市场的建设者和运营商。TradeWeb于2017年5月推出了其全面交易功能（BLAST A2A），作为执行公司债券交易的全面套件的全面套件的一部分。差异化器？通过Tradeweb Direct由机构经销商，买方参与者和零售提供商组成的各种流动性池。与TradeWeb Direct流动性游泳池的连接可以访问超过130多个区域经销商，这促进了据报告的每七个美国债券交易中的一个，而现在占从制度平台上的Blasta2a完成的匿名交易的近30％。

“交易员通用电气tting access to high quality liquidity through a mechanism that provides efficiencies for all trade sizes in ways traders couldn’t imagine just a few years ago,” says Chris Bruner, Head of U.S. Credit at Tradeweb

Today’s traders can combine access to this unmatched liquidity pool with a multitude of tools designed for a more efficient workflow on Tradeweb.

Flexible execution remains essential

With new means of accessing a full spectrum of liquidity providers, traders are also focusing more on how they interact with the market to get best execution for the business they need to get done. A2A trading can play a critical role in this way for some trades, but it also coexists and works alongside a variety of execution tools that help traders get their job done – such as pre-trade data aggregation to auto treasury spotting.

“对于我们来说，矛的尖端是以非常有效的方式将正确的数据连接到执行，但仍然提供具有选择的交易者，”布鲁纳说。“我们的目标是帮助在市场中的决策，无论是在实际安全性方面，无论是在您想要执行的方式方面，您要执行的方式，您要使用什么样的协议。我们构建了一组不仅集成了数据的执行协议，还为客户提供了关于它们如何执行的选择，并帮助他们快速识别正确的选择。“

Networks yield data and transparency

What was once an opaque market for U.S. investment grade credit has rapidly changed, with traders using electronic marketplaces to access a larger network of qualified market participants, which in turn yields more and better data, transparency, and reduced risk.

The increased use of this technology has also revealed the potential for greater end-to-end workflow efficiencies that can save traders significant time and reduce risk even further. With that goal in mind, solutions to enable a fully electronic workflow that minimizes operational inefficiencies are top of mind for innovators in the credit space these days.

There’s so much data available to traders today that it’s easy to become inundated, only to discover high-quality information, when it’s too late to use. For example, those on the buy-side are often flooded with thousands of runs to parse from e-mail messages, sifting through all of it in order to find some useful information about a given security.

“很难知道在一个相当不透明的市场中，贸易照片看起来像什么，”布鲁纳说。

Now imagine a different scenario: Instead of spending precious time trying to filter the most valuable information from that which is less so, you get the information you care about most pushed to you the moment it’s available. That’s what happens in the pre-trade phase on Tradeweb’s electronic platform.

“如果您最关心的100个债券，那就是您将立即向您交付的信息，以便您可以更快，轻松地行动，”布鲁纳说。“创新和自动化使我们能够在经销商流动性和A2A询问中区分高质量的信息，以突出最重要的机会。”

The corporate bond marketplace has clearly begun a significant makeover as market participants are accessing a broader network of liquidity providers. Paired with a complete range of integrated trading solutions at their disposal, the credit landscape is poised to continue its move towards more transparent and efficient electronic trading.