Amid the many electronic trading innovations in fixed-income
markets, corporate bonds have been sputtering. It's a reflection of
recent conditions in the high-grade corporates segment, affected by
interest rates, and it has held down growth at such online
platforms as institutional trading network Market-Axess and retail
underwriter-distributor Incapital. But the rate environment is
changing, the sales outlook is improving, and Incapital CEO Tom
Ricketts told Securities Industry News that 2007 will be
"a huge year" for the boutique investment bank that in 2001
introduced InterNotes, its flagship new-issue product that Bank of
America Corp., DaimlerChrysler, GE Capital and others have used to
get their securities in the hands of retail investors by way of
broker-dealers.
We went from "zero to 60" very quickly. But
in the end, corporate retail notes as a product, our InterNotes
brand, will go up and down with the relative value proposition of
corporate bonds in general.
 Incapital, which
Ricketts, the son of self-directed investing pioneer and Ameritrade
Holding Corp. founder Joe Ricketts, started after developing an
electronic-distribution system within ABN Amro, has underwritten
more than $40 billion of bonds. The firm has expanded
internationally and introduced new wrinkles such as
inflation-protected corporate notes and Basics, which packages
securities in baskets that can be bought in $1,000 increments. In
the area of structured products, working with leaders such as JP
Morgan Chase & Co. and Barclays Capital, the company has tapped
into a noticeable increase in demand from investors seeking out
higher yields.
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