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Types of Bonds

How Big Is the Market, and Who Buys?

Corp. Issuance 2008

The corporate bond market is large and liquid, with daily trading volume estimated at $15.1 billion. Issuance for 2008 was an estimated $702.4 billion.* The total market value of outstanding corporate bonds in the United States at the end of 2008 was approximately $6.1 trillion as of Q3 2008.**

Most corporate bonds trade in the over-the-counter (OTC) market. This market does not exist in a central location. It is made up of bond dealers and brokers from around the country who trade debt securities over the phone or electronically. Market participants are increasingly using electronic transaction systems to assist in the trade execution process. Some bonds trade in the centralized environments of the New York Stock Exchange (NYSE) and American Stock Exchange (AMEX), but the bond trading volume on the exchanges is small. The OTC market is much larger than the exchange markets, and the vast majority of bond transactions, even those involving exchange-listed issues, take place in this market.

* Includes all non convertible debt, MTNs, and Yankee bonds, but excludes all issues with maturities of one year or less, CDs, and federal agency debt. Source: Thomson Financial as of 12/31/08.

Corp. Outstanding 2008

Investors in corporate bonds include large financial institutions, such as pension funds, endowments, mutual funds, insurance companies and banks. Individuals, from the very wealthy to people of modest means, also invest in corporates because of the many benefits these securities offer.

** Sources: SIFMA, Federal Reserve System. As of 9/30/08.


All information and opinions contained in this publication were produced by the Securities Industry and Financial Markets Association from our membership and other sources believed by the Association to be accurate and reliable. By providing this general information, the Securities Industry and Financial Markets Association makes neither a recommendation as to the appropriateness of investing in fixed-income securities nor is it providing any specific investment advice for any particular investor. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and sources may be required to make informed investment decisions.