A number of big commercial-paper issuers have banded together to help launch a direct online product that promises to bring commercial-paper transactions to the desktop.
Billed as the first Internet-based portal for commercial paper, cpmarket .com, a product of Prescient Markets Inc., was prompted by an informal organization called the Direct Issuers Working Group. The bluest of blue chip commercial-paper issuers belong, including General Electric Capital, Ford Motor Credit, General Motors Acceptance Corp., American Express, American General, and 14 other major financial firms.
"We decided about a year ago that the way for us to engage in E-commerce was to come together on one site, so we launched an RFP last April to identify a vendor that might help us build and operate that site," explains Mark Barber, a GE Capital vice president and assistant treasurer.
The Working Group does not have a formal investment in cpmarket .com, but the members have all committed to exclusively use the platform for third-party Internet distribution, says Laurent Paulhac, CEO and president of New York-based Prescient, which was formed in 1999 to develop an Internet-based market for corporate debt. "While they could not commit to a certain volume, what they have done instead is commit to using the platform exclusively for two and a half years for Internet distribution."
Cpmarket.com will be able to execute real-time commercial- paper transactions with speed and efficiency over the Internet using any browser. But beyond that, the site will also offer a broad array of nontransactional services, such as real-time market data and third-party financial services, from multiple sources.
"We are providing the Internet experience that the market is looking for," says Barber. The Working Group constitutes about 18.3 percent of the U.S. commercial-paper market.