Corporate Bond Issues Hold Steady: Q3 2005
Net issues of corporate and foreign bonds held steady during Q3 2005, thereby prolonging a three-year flat trend in corporate bond issuance.
(See Flow of Funds Table F212 Corporate and Foreign Bond.)
The failure of corporate bond issuance to increase with U.S. economic recovery explains, in part, the flatness of the bond yield curve. Although the Federal Reserve Board could manipulate short-term yields upwards, corporate issuers did not correspond by depressing prices of long-term bonds by increasing the supply of new bonds.
The graph shows a remarkable shift in the market for corporate bonds over the decade:
 Who Issues Corporate Bonds?
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There has been a marked down-trend in the issuance of corporate bonds by nonfinancial corporate business since 1998, while there has been a counterbalancing explosion in the issuance of ABS bonds.
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