The corporate bond market is opening up to small investors. NASD has launched its quote system, TRACE,
with more than 20,000 of the highest-rated corporate bonds that are trading in the secondary market.
The most liquid bonds are accessible along with many lower-rated bonds. You can find TRACE at
href=”http://www.nasd.com” target=”_blank”>www.nasd.com
TRACE bond prices are typically available about four hours after the trades have taken place. This
marks a vast improvement over no access or a delay of several days, which formerly might have been the
case.
Although the corporate bond market is still dominated by institutional participants, individuals are
showing growing interest at the higher yields they can generate. More investors are looking to
diversify beyond equities and baby boomers are reaching retirement age, when bonds become more
attractive.
Companies such as and GMAC are issuing debt through programs such as LaSalle Broker Dealer Services’
Direct Access Notes, or DANs, which allow issuers to market notes and bonds directly to investors.
Individuals still buy the bonds from a broker, but they’re not buying the debt on the secondary market
from the large bond houses that have purchased the securities from the companies. Investors are likely
to get better deals buying directly from the issuers.
