This Fintech Company is Digitizing the Primary Bond Market

Overbond Ltd. is looking to shake up the primary bond market by broadening access to its digital platform that connects investors with corporate issuers, as it expands services into larger U.S. market.

Source: Bloomberg

Overbond Ltd. is looking to shake up the primary bond market by broadening access to its digital platform that connects fixed-income investors with corporate issuers.

The Toronto-based company, founded in 2015, will on Friday make its data hub available via mobile and desktop applications in the U.S. and Canada, expanding its reach to 5,000 market participants, according to a press release available on its website. It currently has more than 200 users, mainly in Canada and split evenly between issuers and investors, which have access to its platform via a web application.

The platform, powered by data from Thomson Reuters Corp. and rating agencies including Moody’s Investors Service and S&P Global Ratings, generates ideas for investment opportunities its users can later execute through private placements. The company says issuers are getting a better understanding of the value of their credit, while investors expose themselves to potential new supply. Signals generated by the platform give issuers insight into where demand for their bonds is and save investors hours of research into which companies could be seeking funding.

“We’re a pre-transactions platform,” said Vuk Magdelinic, Overbond’s chief executive officer and founder. “We’ve created the content and now we’re distributing it more broadly. The strategy was engineered for the U.S. market.”

The company says its digital platform is helping to eliminate inefficiencies in the primary bond market by providing better transparency and price discovery.

Its clients includes issuers Toronto Hydro, Dollarama, Epcor, and Enbridge, and investors Mackenzie Financial and Sprott Asset Management.

Overbond is setting up office in New York, which will increase its total staff by a few people to 40. In 2016, it closed a C$7.5 million ($5.9 million) seed financing round with Morrison Financial Services Limited.