Institutional investors are largely not in favour of a retail corporate bond market. One objection is an adverse affect on portfolio revaluations caused by small retail trades. A second, arguably inconsistent objection, is that retail investors will bid down yields. There may also be problems with investment mandates and the indices used for benchmarking performance.None of these problems are insurmountable and should be more than compensated by the advantages of price transparency that listing will bring, and the improved liquidity that will provide greater opportunities for secondary market trading of corporate bonds. Institutional investors should embrace a listed corporate bond market over time.The problems with the wholesale market, which has failed to develop as a viable source of term debt funding for corporate Australia, are likely to have much to do with its operation as an over the counter market. The market seems to suffer excessively from the associated problems of a lack of price transparency and therefore liquidity, in the secondary and even the primary markets. The establishment of a listed corporate bond market should do much to address this problem.Of course, the establishment of a listed market will work only if the issuers can be convinced that it will meet their debt funding needs on a cost effective basis. With the cost of raising debt overseas now becoming prohibitively expensive due to a seemingly ever widening basis swap and banks remaining reluctant and increasingly expensive lenders, this is the time to be considering other alternatives.