Munichain unveils new product for bond ordering/information

Municipal finance software specialist Munichain is rolling out a platform it says will simplify and improve the bond ordering process. 

A Munichain Order Flow Origination (MOFLO) pilot program is available free of charge. At some point Munichain will charge for its use, with details to be determined.

MOFLO is aimed at both the buy side and sell side of the bond origination process, said Munichain Chief Executive Officer Matthew Gerstenfeld. It allows the buy side to easily communicate with the sell side and to use data in influencing the communications, he added.

Muni market participants use a variety of communication means and information systems — sometimes in different locations — in their jobs. MOFLO will bring everything into one package, Gerstenfeld said. 

"The muni market has been drained dry paying sky-high prices for infrastructure that's been decaying for decades. MOFLO flips that script — affordable, sharp and clearly outperforming systems far larger and far older," he said. 

James Pruskowski, an investor and market strategist, said, "MOFLO is a real step forward for new-issue municipals, replacing phone calls and friction with transparency, coordination and straight-through processing." Pruskowski is former chief information officer for municipal bonds, institutional and wealth management at BlackRock and founded 16 Rock Asset Management. 

"You can easily tell the people who built it actually live in the market, because it lines up with how issuers and investors really work day-to-day," Pruskowski said. 

Municipal firms of all sizes are looking to improve their electronification and become more efficient, Gerstenfeld said.

The new system will use structured official statement data from Scottish firm Terrapin and predictive primary market-driven maturity-level pricing from Spline Data. 

"Municipal bond origination has historically suffered from disconnected systems, siloed information and labor-intensive processes that slow execution and increase operational risk," Munichain said in a written statement. 

According to Munichain, MOFLO provides automated, rule-driven workflows; real-time accessibility across teams; seamless data flow; and reduced operational risk. 

Munichain will add MOFLO as a feature with its wider municipal bond workflow infrastructure. Firms will ultimately be able to subscribe to just MOFLO.

Spline Data CEO Matthew Smith said his pricing tool can instantaneously provide buyers with suggested pricing for similarly situated bonds, allowing them to make decisions with confidence. Buyers often don't have time to determine appropriate pricing, he said. The sell side can also use the software to adjust pricing. 

Terrapin Founder and CEO Miguel Jaques said his processing of official statements is overwhelmingly automated.