Make small corporate bonds 'easier' 15 July 2014 6:34PM Philip Bayley Murray Inquiry A deeper and more liquid corporate bond market "would provide diversification benefits to both issuers and investors," the FSI panel said in its interim report released today.It said the proportion of debt funding for Australian corporates intermediated by banks is "broadly consistent with that of other advanced economies with the exception of the United States, which has an unusually large corporate bond market.""Unlike in the United States, there is limited public transparency in the over-the-counter corporate bond market in Australia."Market conditions for both lower-rated and longer-dated issuers have improved recently, with more Australian dollar BBB-rated issuance and at longer tenors in 2013 than in previous years."Australian corporates generally have good access to alternative funding sources. Bank and syndicated loans are usually offered at interest rates similar to those available in the bond market."Australian investors' appetite for fixed income securities is arguably lower than in some other advanced economies," it noted, repeating a common complaint.The Inquiry canvassed:• Allowing listed issuers (already subject to continuous disclosure requirements) to issue vanilla bonds directly to retail investors without the need for a prospectus.• Reviewing the size and scale of corporate vanilla bond offerings that can be made without a prospectus where the offering is limited to 20 people in 12 months up to a value of A$2 million, or for offers of up to $10 million with an offer information statement.