Goldman Sachs will lead the first corporate bond to be traded as well as offered and distributed online - a $1.5 billion issue for DaimlerChrysler.

The financial company will use its proprietary electronic trading system. Corporate bonds that have been offered and distributed online before have not traded online.

DaimlerChrysler's offering will be its first debt transaction to use the Internet. Several other large-debt issues have been sold to investors over the Internet, including a $1.2 billion bond offering by Ford Motor Credit earlier this year.

The new wrinkle - online trading of a corporate issue - highlights the fast evolution of the electronic bond market. Until now the only issue to be both offered and traded over the Internet has been a $3 billion bond deal in the first quarter by the World Bank.

While institutional and retail investors could buy Ford bonds online, using Web sites maintained by lead manager Lehman Brothers and co-manager Fidelity Capital Markets, they had to fall back on traditional brokerage methods to trade those bonds on the secondary market.

Citing SEC regulations, DaimlerChrysler declined to say how much of the offering will be offered online or whether it would use any other managers for a retail portion.

Goldman Sachs, which will use its proprietary trading system, web.et, to offer, distribute, and trade the issue, deals only with institutional customers.

Ford Motor Credit used Fidelity's retail distribution capabilities to diversify its group of bondholders.

And the World Bank, in addition to using lead managers Lehman and Goldman Sachs to manage its sale, employed the retail brokerage Charles Schwab & Co. to sell the bonds to retail investors over the Internet.

While offering bond deals over the Internet has become more commonplace, electronic bond trading is still in its infancy, and many larger brokerage houses are scrambling to put together proprietary or shared systems that will allow this to happen.

"There's a lot of interest in moving towards secondary trading" over the Internet, said Michael Decker, vice president in research and policy analysis for the Bond Market Association. "But there hasn't developed the [level] of transaction volume for me to characterize it as the typical way bonds trade."

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