published: 11.15.01

U.S. Bond Issuance on Pace for a Record Year as New Issues Total $3.2 Trillion Through September.

New issue volume in the first three quarters of 2001 totaled $3.2 trillion, an increase of 59.9 percent over the $2.0 trillion issued in the same period a year earlier. The U.S. bond markets continue to benefit from the flight to quality that results from investors seeking to diversify their portfolios with safer and relatively more stable fixed-income securities during times of economic uncertainty and volatility in equity markets. On the supply side, issuers have benefited from the low-interest-rate environment that has persisted in 2001. Issuance was higher across all sectors of the bond market for the first nine months of the year, with the strongest increases occurring in the federal agency, mortgage-related, and municipal sectors. New issue activity in the corporate and assetbacked sectors was also up, but activity slowed sharply in the third quarter as seasonal factors and the market disruption due to the tragic events of September 11 delayed a number of deals. Secondary market average daily trading volume was higher in the first three quarters of 2001 across all reported markets, with the exception of the municipal market.