"Pssst! Wanna buy some second-hand bonds? Going cheap at half the marked price. Several owners over the past few months - company's a bit of a basket case and the price has been all over the place - but all of them very careful..."

Perhaps not quite the words that might actually be used by professional dealers on the international bond markets, but maybe not so far fetched..

Every day, on markets across the world, the debt owed by some of our most well-known and respected companies, changes hands.

Just as equity investors buy and sell shares in companies based on their earnings performance, yield expectations and touchy-feely things such as a valued executive heading for the exit, so bond dealers trade debt.

The bonds don't trade at the kind of breakneck speed of equities, but the so-called "secondary market" in bond dealings has been growing steadily for two years. Bond dealers also tend to be slighly more pointy-headed than some of the rest of us and focus with an unswerving devotion on the gods of cashflow and capital repayment. But, despite a four-year-long bull run in the debt markets that has seen some leading companies almost crippled by the amount of debt they have managed to pile on, the idea that there might actually be a market in these arcane instruments appears to have escaped a scarily large number of finance directors of Britain's medium-sized businesses.

The corporate finance arm of Close Brothers reported in a survey this morning that 50 per cent of FTSE 250 finance directors are completely unaware that their debt is being traded.

This is breathtaking. And even more so when you consider that nearly two-thirds of those finance directors who knew there was a market in their debt, viewed this as a "negative development", according to Close.

If today's survey is truly an accurate reflection of the lack of knowledge in some of Britain's boardrooms, then these directors would do well to start enrolling in some "Understanding the City" evening classes.

For the fact is that the debt markets have been growing at an irresistable pace in recent years - even the directors questioned in the survey made it abundantly clear they would far rather raise capital by issuing bonds than asking their shareholders to subscribe to a rights issue, for example.

So if they want to issue bonds on behalf of their companies, then these executives need to know how they work.

Moreover, the debt markets are beginning to show signs of more equities-like behaviour, particularly where the American investment banks will use bonds to take a position in a company as equally as shares. The banks are also becoming far more aggressive about selling out of their bondholdings in a company if they think the investment no longer stacks up or they don't like the direction it is taking.

And as the market develops further, companies are finding themselves increasingly held to account by their creditors. An unwitting finance director may find that his struggling financial position throws him into a meeting room with a hedge fund or, worse still, a "vulture fund" that specialises in circling companies that are at risk of being broken up.

These funds will take no prisoners in negotiations with executives. Vulture funds have a habit of using the courts to get what they want.

Finance directors are supposed to be hot property at the moment. They have been walking away from some of the country's top public companies in recent months, confident that the demand for their services means they will easily find a new home somewhere else.

But if they don't have the nous to know that what might be owned by a bank one day could be owned by a vulture fund the next, then they deserve to be shown the door, and cordially helped through it.

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