Oct 6 (Reuters) - A group of 12 global banks are workingtogether to set up a one-stop bond shop for buyers and sellersof corporate bonds, the Wall Street Journal reported, citingpeople familiar with the matter.
The initiative, called "Neptune," will not be for executingtrades, rather it will link up banks and investors in the marketand potentially some of the existing trading platforms they use, the newspaper reported. (http://on.wsj.com/1xfufSR)
The banks, which include BNP Paribas SA, CreditSuisse Group AG, Goldman Sachs Group Inc, HSBCHoldings and JP Morgan Chase & Co, are set topay 30,000 pounds($47,934) each for the first phase ofconsultancy work, the WSJ said.
AXA Investment Managers and Schroders Plc also areinvolved in the discussions, the report said citing executivesat those firms, alongside a dozen or so other money managers.
Bond liquidity has all but dried up for corporate issuesafter new regulations and capital requirements forced WallStreet banks to slash their inventories of fixed-income productsfollowing the financial crisis.
The lack of liquidity also means funds may have troubleselling bonds in the event interest rates rise and the investorswho have sunk about $1.2 trillion in net deposits into long-termbond funds since the end of 2004 head for the exits.
Neptune is the latest in a string of attempts to makecorporate-bond trading more efficient. Investors have complainedabout a growing disparity between trading volumes in new and oldbonds, the report said.
JP Morgan, Goldman Sachs, Credit Suisse, BNP Paribas andHSBC did not immediately respond to emails seeking comments onthe report.
($1 = 0.6259 British pound) (Reporting by Supriya Kurane in Bangalore; Editing by GopakumarWarrier)
Schroders (SDR)
HSBC Holdings (HSBA)
