Vega-Chi, a multilateral trading facility for bonds, has confirmed the launch of its new electronic order book for high-yield and subordinated financial bonds in Europe.
The platform offers buy-side institutions the ability to trade fixed income instruments directly and bypass intermediaries. According to Vega-Chi, the ability to transact directly allows institutional investors to obtain better prices for their trades and gives them a more transparent alternative to the over-the-counter market. Vega-Chi has over 50 buy-side clients signed up to its platform.
Bonds are typically traded OTC, but regulatory initiatives including MiFID II are set to impose greater transparency for fixed income instruments.
“As with our convertible bond trading platform, we offer our clients a value-added service which allows them to access liquidity straight from the end-users for high yield bonds and subordinated debt,” said Constantinos Antoniades, CEO, Vega-Chi. “We expect the cost savings to clients in the form of better price execution to be significant. The market response has been very strong and we expect that Vega-Chi will help the formation of a more efficient market place for the asset class.”
Other bond trading platforms that offer trading in high-yield bonds include Tradeweb, which added the instruments to its credit platform last June, and MarketAxess. Unlike Vega-Chi, both of these platforms offer a dealer-to-customer model, where buy-side firms request prices from brokers for the exposure they require.