The Bank of New York has acquired the assets and trading system of Greenwich, CT-based BondNet, an electronic bond trading system that allows trading execution for corporate debt. Similar to the Reuters Instinet system, BondNet also trades other products at a spread over the U.S. Treasury curve, according to Thomas Price, Bank of New York svp in charge of the division.
Most of the corporate bond market is conducted via telephone, much like the foreign exchange market, says Price. "Almost the entire market for corporate bonds is an over-the-counter market, which is certainly not the most efficient way to get trades done." Some bonds trade on the NYSE exchange, he concedes, "but many of them trade over the counter too." Price says his division is the only live, on-line execution system for bonds.