Citi and Bank of America, joined by Credit Suisse, Goldman Sachs, J.P. Morgan, Morgan Stanley, Wells Fargo, and Moody’s Analytics, have launched an independent company, Octaura, whose goal is to create the first open market electronic trading platform for syndicated loans and collateralized loan obligations (CLOs).
Built in collaboration with Low-code software development platform Genesis Global, , Octaura will provide electronic trading protocols for price negotiations, straight-through processing (STP) for trade booking, and data and analytics functionality supplied by Moody’s Analytics.
Octaura began as a joint incubation and co-development initiative between Bank of America and Citi, within its Sprint (Spread Products Investment Technologies) team. Citi’s internal Velocity CLO eBidding platform and BofA’s Instinct Loan Match platform improved efficiency, liquidity and transparency for users and were the inspiration for Octaura.
The launch arrives at a time of unprecedented growth in the CLO and syndicated loan markets, which have doubled in size over the last decade to more than $1 trillion and $1.4 trillion in outstanding notionals, respectively.
The Octaura venue for loans will launch first, with the CLO trading venue to follow. The company then plans to expand to other products in the credit market.
Industry veteran Brian Bejile has been named chief executive officer, having previously spent more than 18 years with Citi, rising to global head of CLO Issuer Management.
Says Bejile: “The secondary markets for trading syndicated loans and CLOs have not significantly evolved since syndicated loans first started trading over thirty years ago. When we launched CLO eBidding on Citi Velocity, we saw a 50 percent jump in bid volume in the first week. With that, the idea for Octaura was born.”