The last couple of years produced a bumper crop of new corporate bonds as companies raced to market to take advantage of the low interest rates. Amid the heavy new issuance, though, trading of corporate bonds in the secondary market has been declining, a victim of those same low rates and constraints on dealers' capital.

The state of secondary market liquidity could exacerbate bond market sell-offs as interest rates rise. That might seem to be more of a concern for dealers and investors than for the companies that issue bonds. After all, demand for new corporate bonds remains strong, and getting its debt sold is a company's main concern.

Some market participants argue, though, that the changes taking place in secondary corporate bond trading will eventually affect issuers as well. Back in May, asset management firm BlackRock, a major buyer of fixed-income securities, put out a paper suggesting that large corporate issuers could give secondary market liquidity a boost if they standardized their bond issuance. "Some standardization seems inevitable," according to the BlackRock paper.

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Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.