A Web-based trading desk developed by eBondTrade, an electronic broker-dealer, began in January to offer $75 million in already issued debt. eBondTrade buys the bonds itself and maintains them in an inventory, which is searchable online. "For the first time, a broker- dealer is offering live inventory with prospective live prices," says CEO Rich Meister.
Meanwhile, MuniAuction--which in 1998 hosted the first online sale of a city's municipal bonds--offered in December an auction of already issued debt, including bonds from Maryland, North Carolina and Pittsburgh. Based on the popularity of that auction, MuniAuction plans to add capacity and frequency.
The Bond Market Association, a trade group for securities firms and banks that deal in debt securities, started in 1998 to post a limited number of daily municipal bond transactions on its Web site, www.investinginbonds.com. In January, it expanded that effort to include all municipal bonds that traded four or more times on the prior trading day. That means prices for about 1,000 bonds out of the 1.4 million outstanding issues will be available. The service allows an investor to compare relative value for a bond by identifying similar securities by state, credit rating, maturity and call features.
Several traditional brokers, not to be left behind, have Web sites and are showing inventories and prices of municipal bonds online. Some are selling online, too.
