This is partly due to current practices like holding loans to maturity. Currently, sellers make telephone calls and send faxes to a small number of counterparties hoping to find a buyer. The secondary loan market is very different from the bond market because intermediaries play a very small role in promoting liquidity in a very fragmented market. The plan for debtdomain is to simplify this process for market participants. We have found through our extensive market research that an anonymous order-matching exchange is much more suited to large institutions trading loans, says Tai.
Members don t pay a cent unless they actually successfully close a transaction.
Then the fees vary. The other exchange There are similarities between debtdomain and asiabondportal. Both trading sites have been developed and are based in Asia. As Tai remarks, the bond market is much more concentrated than the secondary loan market with a small handful of market-making institutions accounting for the bulk of the transactions. Asiabondportal has adopted a model that seems to utilise intermediaries and encourage their use to gain liquidity, says Tai.