Nasdaq has launched a Corporate Bond exchange for listing and trading of corporate bonds which was approved by the Securities and Exchange Commission (SEC) on 13 November 2018.
“Fixed income investors have undergone a number of market structure and technological changes since the 2008 financial crisis, while at the same time companies have increased their issuance to take advantage of a low interest rate environment,” says Ted Bragg (pictured), head of US Fixed Income at Nasdaq. “Nasdaq-listed companies today have underwritten more than 3,000 corporate bonds, and there exists an opportunity for public companies to list their equity and debt in a more cost effective way, using Nasdaq trading technology and surveillance, which is substantial.”
PepsiCo claimed the inaugural listing on 27 November when it announced it will transfer the securities exchange listing for four separate senior notes due between 2021 and 2028.
This new exchange will run on the Nasdaq Stock Market license and will be powered by the Nasdaq Financial Framework, Nasdaq’s next generation market infrastructure technology platform. Surveillance will be conducted by the Nasdaq Regulatory team, including use of its global market surveillance system, SMARTS.
Nasdaq Nordics currently lists 1,287 corporate bonds across six exchanges, seeing more than 80 per cent growth since 2013, and Nasdaq will bring this experience from that market to its entry into the US bond listing market. Sustainable bonds account for about 10 per cent of total corporate and municipal bonds listed on Nasdaq Nordic, and has grown nearly four-fold since 2015.