Eligible bonds must have a minimum outstanding size of at least $2 billion with a minimum rating of AA-/Aa3 to qualify for listing. The new segment will initially include securities from the following issuers: Depfa, European Investment Bank, Fannie Mae, Federal Home Loan Bank, Freddie Mac, Inter-American Development Bank, KfW, the Republic of Italy and the World Bank. Replicating the market practice, the bonds will be quoted and traded in spread against U.S. Treasuries. Trading on the segment will be anonymous.
Rene Karsenti, Director General of Finance of European Investment Bank (EIB) said: "EIB's primary and secondary market strategy aims at providing transparency and liquidity to investors. EuroMTS is already a key instrument to help in this strategy in the euro-area. The launch of a US dollar segment of electronic trading adds a useful tool for the service of investors in another core currency of the Bank's funding programme."
Jerome Lienhard, Senior Vice President, Global Debt Funding for Freddie Mac said: "The growth of international investor participation in Freddie Mac's Reference Note program has been a cornerstone of our funding strategy. Ideally, market participants should have outstanding liquidity regardless of their time zone or physical location. The launch of U.S. dollars on EuroMTS will both validate the existing liquidity and stimulate additional liquidity for Reference Notes during non-U.S. hours. We are extremely pleased to be included in the initial phase."
Christian Zocher, Director, Fixed Income Credit Trading at Deutsche Bank said: "Deutsche Bank is very excited about the introduction of the EuroMTS US dollar trading platform which is the first electronic interdealer system for US dollar Sovereigns/Supranationals and Agencies in Europe. The expected increase of liquidity will eventually lead to lower transaction costs and more competitive pricing, which will be of benefit to customers, issuers and the trading community. Deutsche Bank, which acts as one of the main liquidity providers in all euro markets, is committed to playing the same role in the US dollar market, where we have been growing market share aggressively."
Simon Clarke, Head of Agency and Supranational Trading for Morgan Stanley in London, said: "We welcome the expansion of MTS to the US Dollar market. MTS has become an enormous force in the euro market and has a strong opportunity of meeting similar success in US Dollars."
The launch of the new segment reflects the growing market activity in dollar denominated instruments during European market hours and responds to the needs for increased transparency and liquidity by dealers and investors.