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Syndicated Loan Trading: An Automation Laggard No More

September 20, 2024 | 1 minutes reading time | By John Hintze

Big-bank-backed Octaura and Versana are delivering on their promises for data and operational modernization.

While waves of technological innovation swept through one capital-market segment after another over the last quarter century, trading of syndicated loans remained mired in manual inefficiencies and plagued by weeks-long settlement cycles. Modernization initiatives launched in 2022 by bank-led joint ventures Octaura and Versana are now shifting this $1.39 trillion market into high gear.

Octaura, incubated and co-developed by Citi and Bank of America, set out to usher leveraged loan and structured credit trading onto a sleek digital platform. In June it traded 2.2% of secondary loan trades – out of a total market that the Loan Syndications & Trading Association (LSTA) calculated at $62.7 billion.

Credit Suisse, Goldman Sachs, JPMorgan, Morgan Stanley, Wells Fargo and Moody’s Analytics became co-owners of Octaura, where Brian Bejile from Citi serves as chief executive officer.

Vitaliy Kozak of Octaura

Secondary-market trading strengthens banks’ relationships with corporate borrowers, but intermediating trades is capital intensive, Octaura chief product officer Vitaliy Kozak explained. Bids wanted in competition (BWICs), submitted...

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