Corporate Bond Issuance Since 1996

With interest rates at record lows and possible tax changes on the horizon, a number of companies have been accessing corporate debt markets and using the proceeds to alter their cap structure.  Today, Intel was the latest company to announce a debt offering to repurchase shares after that stock has fallen more than 30% since May.

One of the goals of maintaining a zero interest rate environment is to encourage consumers and companies to take actions like this.  The Fed is trying to push the economy to re-lever.  So far, it has had mixed success in this pursuit, although borrowing has begun to pick back up in 2012.

As far as corporate debt securities go, 2012 could be a strong year.  US companies are on pace to issue $1.3T in new debt into securities markets (through October).  This would be a new all time high and is already more than was sold in all of 2011.  As a percentage of corporate bonds outstanding though, that number is still lower than in the late 90s--only 16% vs over 25% back then.  It's almost double what was issued in 2008 when credit markets froze though.

Source: SIFMA