IPO Profile

MarketAxess Holding
140 Broadway, 42nd Floor, New York, New York 10005
Tel: 212-813-6000
Web: www.marketaxess.com
Ticker: MKTX
Amount Raised: $55,000,000.00

Description:
Our client base includes 19 of the largest broker-dealers in global fixed-income trading and approximately 575 institutional investor firms, including 80 of the top 100 global holders of U.S. corporate bonds, as measured by Thomson Financial. Our broker-dealer clients accounted for approximately 98% of the underwriting of newly-issued U.S. high-grade corporate bonds and approximately 59% of the underwriting of newly-issued European corporate bonds in 2003, and include 9 of the top 10 broker-dealers as ranked by 2003 new-issue underwriting volume of European corporate bonds. We believe these broker-dealers also represent the principal source of secondary market liquidity in such securities, as well as in emerging markets bonds. Since the commercial launch of our electronic trading platform in January 2001, we have experienced significant growth in trading volume and strengthened our market position. Our annual trading volume has grown from $11.6 billion in 2001, to $48.4 billion in 2002 and $192.2 billion in 2003, representing a compound annual growth rate, or CAGR, of over 300%. As a result of this growth in trading volume, our revenues have increased from $6.6 million in 2001, to $18.7 million in 2002 and $41.2 million for the nine months ended September 30, 2003, and our net income has increased from a loss of $62.7 million in 2001, to a loss of $32.6 million in 2002 and to income of $4.7 million for the nine months ended September 30, 2003. Our Market Opportunity The global fixed-income market is large and has experienced significant growth in trading volume and amount of debt outstanding over the last several years. In the U.S. fixed-income market, for example, there were approximately $22 trillion of fixed-income securities outstanding, including over $4.3 trillion of U.S. corporate bonds, as of September 30, 2003. We are currently active in three segments of the global fixed-income securities market: U.S. high-grade corporate, European credit and emerging markets. We believe that trading activity in these markets is growing. For example, the average daily trading volume of U.S. corporate bonds grew from $18.9 billion in 2002 (the first calendar year for which such data are available) to $20.7 billion in 2003. We believe the markets in which we are active will continue to grow strongly as a result of many factors, including, among others, improved price transparency, the introduction of centralized electronic marketplaces, growth in credit derivatives, increasing amounts of total debt outstanding, growth of the European Union and the globalization of the world economy. Traditionally, bond trading has been a manual process driven by voice communication between two or more parties. This traditional process has a number of shortcomings resulting primarily from the lack of a central trading facility for fixed-income securities, which creates difficulty matching buyers and sellers for particular issues. The lack of a liquid, centralized marketplace results in significant operating costs for both 1 -------------------------------------------------------------------------------- broker-dealers and institutional investors. In the case of broker-dealers, the resulting low inventory turnover significantly increases their credit risk. Likewise, institutional investors may have difficulty locating counterparties for the trades that best match their risk and return objectives and that allow them to better diversify their portfolios. Additionally, the lack of a central facility creates information inefficiencies, as investors lack the consolidated pricing information and analytics that would enable them to determine the best security for their needs and the competitiveness of the prices they are quoted. Furthermore, the traditional trading process entails compliance and regulatory risks and creates multiple opportunities for errors. Broker-dealers and institutional investors spend significant time and money to remedy these inefficiencies.