When various global leading banks join forces, it is time to pay attention. Several other entities join Citi and Bank of America to launch Octaura, an independent company. The objective of this new company is to establish the first open market digital trading solution supporting syndicated loans and collateralized loan obligations.
Octaura Has Arrived
It is interesting to see such a global initiative with the support of Credit Suisse, Goldman Sachs, Morgan Stanley, Moody’s Analytics, J.P. Morgan, and Wells Fargo. Together with Citi and BoA, they establish Octaura. It is a new platform built in collaboration with Genesis Global. Introducing digital trading protocols for price negotiations, data and analytics, and straight-through processing for trade booking is a significant step forward.
The Octaura project is not entirely new, as it was initially part of an incubation initiative between Citi and BoA. Although both entities made significant strides – and increased efficiency, liquidity, and transparency – it was not the ultimate goal. Octaura will now enter the market at peak liquidity for the collateralized loan obligations and syndicated loan markets. Those represent over $1 trillion and $1.4 trillion in outstanding notionals.
Octaura Chief Executive Officer Brian Bejile adds:
“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.”
Octaura’s primary purpose is to focus on loans, with the other features to follow at a later date. Once the loans and collateralized loan obligations pillars are up and running, the team will look to expand. A venture into the credit market is on the table, giving these seven banks a finger in multiple pies.