Analysing data from the firm's annual North American fixed income research among 1000 institutional investors, Greenwich believes that the corporate bond market is going through an evolution, but not yet a revolution.

The report finds that institutional investors are taking tentative steps to utilise new sources of liquidity to execute corporate bond trades and are forming new trading relationships through electronic trading platforms. The average number of dealers used is up 35% since 2009, although the market continues to be dominated by the top dealers.

Greenwich Associates estimates that 16% of institutional investment-grade corporate bond trading volume is executed electronically today, with four out of five firms utilising electronic trading platforms for some portion of their trading.

"Everyone willing and able to quote a competitive price in response to an RFQ has the ability to win business from the 80% of buy-side firms actively trading corporate bonds electronically-something not possible only five years ago," says Kevin McPartland, head of research for market structure and technology at Greenwich Associates.

MarketAxess continues to be the market share leader in North America, executing 86% of dealer-to-client investment-grade corporate bond electronic trades.

Greenwich Associates believes electronic trading of lots between $100 thousand and $5 million in size will continue to grow in the coming years, with the potential to take the market-wide percentage of volume traded electronically to 20% by 2016.

Growth in electronic trading of block trades - those over $5 million - will be a much more challenging endeavor, says the firm, as these trades are the ones that the buy side brings to dealers via phone, not only for market color and liquidity, but also to build up a relationship that ensures access to sought-after new issue allocations.