The online market for muni bond shoppers is expanding.
Mitre Media plans the beta launch this month of an online tool designed to connect buyers and sellers of municipal securities. The tool, called Marketplace, will reside on Mitres existing municipalbonds.com domain: a CUSIP-searchable website that provides analytics, research and data on municipal securities.
The new platform acts as a marketplace, to add liquidity and sync buyers and sellers, says Tom Hendrickson, founder and CEO of Edmonton, Alberta-based Mitre, which operates targeted financial websites.
It will be the second debut in recent months of an online venture aimed at linking buyers and sellers of municipal bonds. In August, New Yorks Lebenthal debuted its newly formed broker-dealer, MuniAxis Lebenthal: the first municipal bond platform to improve liquidity and distribution of odd lots.
Hendrickson is hoping existing traffic on municipalbonds.com, which Mitre acquired a year ago, will increase use of the Marketplace component and set it apart from broker-dealers promoting similar e-commerce platforms. The difference is that municipalbonds.com comes up first in search results for 1 million CUSIPs, he says. We reach retail in a way that would cost $200,000 per month for anyone else.
The new tool, he says, will complement existing offerings on the site, which provides real-time updates, Municipal Securities Rulemaking Board trade data and average bond yields by state, as well as price history, education and research. Like traditional online auction sites, the Marketplace tool will allow investors, financial advisors or RIAs to post merchandise - in this case bonds by CUSIP or quantity - in a list that is circulated a few times a day to a network of dealers, Hendrickson says. Users have the option of being public or remaining anonymous.
Lebenthals MuniAxis platform employs open-auction bidding to let users buy and sell municipal secondary market securities in denominations of less than $1 million. Buyers and sellers remain anonymous and can complete transactions directly on the site through a counterparty.
Unlike users of MuniAxis and standard auction sites, users of the Marketplace tool must conduct the sales transactions outside of the site. Hendrickson says he may explore partnering with broker-dealers to broaden transaction capabilities in the future. In the meantime, he believes, the initial connection between buyer and seller will save time and enhance efficiency for both parties.
Besides tapping into existing users, Hendrickson hopes to gain support from hedge funds seeking to profit from recent price discrepancies.
The new tool will be free to users during the launch, he says: As the Marketplace grows and the networking effect takes hold, it will evolve into a paid service on a subscription basis.
Christine Albano is a reporter at The Bond Buyer.