New bond issues are sold in the primary market. In a new issue, most of the terms are set, including the initial price and interest rate, and the bonds are sold to investors, with the issuer receiving the proceeds of the sale.
A secondary market transaction does not involve the issuer, but is a transaction between two investors - a buyer and a seller. Secondary market transactions involve a brokerage firm which acts either as an intermediary between the buyer and seller, or as a buyer or seller itself. Market conditions, such as prevailing interest rates, supply and demand, and credit quality, among other variables, determine the price, which may differ from the original price.
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