The 2006 U.S. bond issuance increased to $6.13 trillion, the second highest volume ever, from $5.71 trillion issued in 2005. Corporate bond issuance, at a record-setting $1.05 trillion, increased close to 40 percent from year-ago levels, and issuance of asset-backed securities also set a new record for the year.
Treasury coupon issuance increased 4.6 percent, to $780.8 billion for the year on a higher volume of refunding of maturing debt in 2006. Equity indices rose during the year with the Dow setting a record, and lower rated and high yield corporate bonds were the top performing fixed-income asset classes in 2006.
“The big drivers of activity in the bond markets last year were healthy economic growth, low long-term interest rates, favorable credit conditions, and a global abundance of capital seeking investment opportunities,” says Michael Decker, head of research and public policy at SIFMA.
“Looking forward we expect issuance volume to remain strong and close to the 2006 levels, as many of the same financial market conditions remain in place as we begin 2007,” he adds.