Toronto-based fintech company Overbond Ltd. has integrated Thomson Reuters fixed-income market data and analytics within the Overbond platform, with both companies agreeing to collaborate on research and development related to increasing innovation in the fixed income capital markets.
Founded in 2015, Overbond is the first fully-integrated fintech platform in the new bond issuance market, directly connecting corporate and government bond market issuers with dealers and fixed-income investors.
“Access to Thomson Reuters data universe and market analytics within the Overbond platform optimizes price discovery for participants in the primary bond origination market,” said Overbond CEO Vuk Magdelinic. “Through our partnership with Thomson Reuters, the Overbond platform now provides market participants with unparalleled price discovery capabilities to help them navigate what is currently a very challenging fixed income market.”
In June, Overbond closed a $7.5 million seed financing round led by Morrison Financial Services, which normally focuses on construction and real estate financing rather than start-up venture capital.
“This integrated offering from Overbond is a step forward in addressing current secondary market liquidity challenges and enabling digital bond origination,” said Jamie Grant, Global Head of Rates & Credit at Thomson Reuters. “Thomson Reuters open platform strategy enables us to support innovation across financial markets. We look forward to working with the team at Overbond to develop innovative new solutions that solve some of the most complex challenges faced by the participants in the primary bond market, such as transparency and efficient allocation of capital.”
Each year, Canadian dealers and issuers spend 125,000 hours managing the receipt of more than 2.3 million bond market updates by email, a problem which is an order of magnitude worse in the United States.
The combination of manual order taking by brokers in real time and increasingly strict regulations in the financial industry has led to a liquidity crunch that could be alleviated by the application of technological automation.
A challenge remains in benchmarking and price discovery of new bond offerings, owing to significantly reduced secondary market liquidity, a problem that aims to be solved with the integration of the Thomson Reuters data product suite, which is designed to improve the flow of information and increase transparency.
Overbond’s proprietary, cloud-based platform modernizes all aspects of bond origination by providing secure communications, price discovery, and custom reporting and analytics, while reducing operational risk and transaction costs for issuers, dealers, and investors.
The platform features end-to-end processing capability and a support framework for primary bond origination to help its client base, consisting mainly of investment-grade corporate issuers, to manage their large borrowing programs, some of which include $20 billion in outstanding bonds.
The company graduated from both the MaRS fintech cluster in Toronto and the Communitech technology innovation super-cluster, before moving on to the Toronto chapter of the Founder Institute program.
Overbond is headquartered in Toronto, with operations in New York.
Last year, Thomson Reuters launched a data and innovation lab, called Thomson Reuters Labs, at Waterloo’s Communitech Hub, after having already established a Data Innovation Lab at MIT in Boston.