Our clients include large corporations, (eg Daimler), major financial institutions (BNP, Rabobank), as well as supra-national and sovereign agencies (the World Bank, IFC). These borrowers will issue large public benchmark bonds ($1bn+) a few times a year, but will also issue smaller private placement MTNs ($75mm on average) on a monthly/weekly (sometimes daily) basis. MTNs are generally issued directly to a single investor, (rather than a group of 200+ investors for a public bond deal...
Our clients include large corporations, (eg Daimler), major financial institutions (BNP, Rabobank), as well as supra-national and sovereign agencies (the World Bank, IFC). These borrowers will issue large public benchmark bonds ($1bn+) a few times a year, but will also issue smaller private placement MTNs ($75mm on average) on a monthly/weekly (sometimes daily) basis. MTNs are generally issued directly to a single investor, (rather than a group of 200+ investors for a public bond deal). Borrowers enjoy a 10-15 basis point pricing advantage in their funding costs relative to the benchmark market, and will secure roughly 30% of their long term borrowing from MTNs. Investors like it because it allows them to find custom investments that are specifically tailored to the needs of their portfolios. Roughly $500bn is issued annually.
Currently, communication between both sides is completely manual and unstructured. Borrowers "post" regular updates to their funding program and target funding levels by blasting an email to a group of 20-30 dealers. Each dealer receives these emails weekly from 200+ borrowers, and spends 2-3 days/week collecting and transcribing the information into an internal spreadsheet. On Origin, borrowers post all their information directly onto the platform in a structured format. Dealers can log in and see the funding targets updating in real time. We also have a number of tools (cross currency pricer, historical charting, primary vs secondary market comparison) so that dealers can easily spot opportunities to trade. Beyond the data capture, the platform serves as a workflow tool, allowing both sides to keep track of inquiries and communicate to each other. When an inquiry goes “live,” dealers can use the platform to automatically generate a termsheet to share with borrowers and investors. Ultimately, the platform will be the central source of trade data, allowing us to replace current deal databases and league tables.
Origin Markets are a team of focused professionals who have created an innovative, efficient and cost effective approach to the facilitation of institutional bond new issuance. The team are smart and client focussed, the technology is great and the end result is outstanding. For any issuer, dealer or investor active in the new issue market, The Origin technology is a must have.
I have had the pleasure of getting to know the team behind Origin Markets since its inception and have been continuously impressed by their vision and ability to execute, two hallmarks of a successful early stage company. Beyond the team is the market opportunity which in the case of bonds is well into the trillions of dollars. The Bond market, being historically driven by brokers and middlemen, is ripe for disruption by a digital marketplace like Origin. It is rare to see a combination of such a strong team and gigantic market disruption. And giant hedge funds and bond issuers are lining up to be a part of the Origin story, making them one of the hottest FinTech start-ups in London. I wholeheartedly endorse Origin for the BBVA competition.
I have been involved in the capital markets for over 21 years both in the US and in the UK. Previously, I was a managing director in fixed income structured products, and am currently a senior portfolio manager at a large hedge fund. I have been working and advising the Origin team for the past several months, as I believe that their product offering has the capacity to change the way issuers and investors interact, and I think that their team has the necessary skills, work ethic and capabilities to crystallize this change into a viable, profitable business.