HSBC is the latest firm to launch an electronic platform for trading corporate bonds, as participants look to encourage greater trading between buyside investors to combat the drop-off in market liquidity. HSBC Credit Place had gone live in October 2013, although no public announcement has yet been made. Some 34 investors have since joined, while a further 16 clients are in the process of signing up. According to Niall Cameron, global head of credit at HSBC, there is a fundamental problem in the credit markets that would not go away: the buyside now holds around 99% of outstanding corporate bonds. Investors need to move more bonds between themselves, and the bank thinks the platform is an effective way to do that. Credit Place currently shows live prices on around 1,000 securities traded off HSBC’s London bond desk and 400 securities from its Hong Kong unit. It eventually plans to offer prices on 2,500 bonds in total. The platform is aimed at large-scale transactions. These block trades are an area of the market that has been particularly badly affected by banks’ decision to scale back capital provision as a result of more stringent regulation. The minimum ticket size is EUR500,000 on high-yield bonds and EUR1m on investment-grade securities.
