Board of Governors of the Federal Reserve System

1996 Survey of Corporate Medium-Term Notes

April 16, 1997
1996 Survey of Corporate Medium-Term Notes

U.S. corporations issued $93.7 billion of medium-term notes (MTNs) in 1996, down from

a record $98.9 billion in 1995 (table 1.A). The slower pace of issuance is entirely

attributable to nonfinancial firms, which sold $11.7 billion in 1996, $7.8 billion less than in

1995. Issuance by financial firms rose $2.5 billion to $82.0 billion, a record for these

firms. A total of 165 firms sold MTNs in 1996, the fewest since 1990 and 30 fewer than

in 1995 (table 1.B). The number of nonfinancial issuers, which dropped by one-third,

fully accounted for this decline; the number of financial issuers increased by 9 to 87. 

Since 1983, when the Federal Reserve began collecting these data, 528 companies

have raised funds in the MTN market, including 206 financial companies and 

322 nonfinancial companies. During 1996, total MTNs outstanding rose $19.8 billion 

to $287.3 billion (tables 2.A and 3). As of year-end, 411 firms--126 financial and 

285 nonfinancial--had MTNs outstanding (table 2.B).

The corporations that issued MTNs in 1996 continued to have high credit ratings

(table 5). More than 99 percent of the MTNs issued last year had investment-grade

ratings. Single-A-rated issuers were again most common and accounted for 65 percent

of total issuance. Only four firms with speculative-grade ratings issued MTNs last year. 

Because the volume of speculative-grade issues has always been small, outstanding

MTNs also have high credit ratings; 98 percent of outstanding MTNs were rated

investment-grade at year-end 1996 (table 6).

The MTN market accounts for a sizable share of intermediate- and long-term

borrowing by U.S. companies. One measure of the MTN market share is the volume of

MTN issuance as a percentage of total public issuance of investment-grade debt 

(MTNs plus straight corporate bonds). As shown in table 7, MTNs were less important 

in 1996 than in 1995, as the issuance ratio dropped 4 percentage points, to 43 percent. 
The reduced importance of MTNs was particularly pronounced among nonfinancial

companies, which reduced their relative usage of MTNs for long-term financing by 

10 percentage points, to 16 percent. Given the reduced importance of MTN issuance,

the ratio of MTNs outstanding to the amount of public long-term debt outstanding 

(MTNs plus public corporate bonds), another measure of the MTN market share, fell 

1 percentage point, to 18 percent (table 8).

The Division of Research and Statistics of the Federal Reserve Board obtains

these data from a survey of U.S. corporations that borrow in the public MTN market. 

The reported figures do not include borrowing in the "Euro" markets or the private

placement market (both traditional issues and securities sold under SEC Rule 144a are

excluded). Moreover, the survey does not include offerings by foreign corporations,

sovereigns, supranationals, or federal agencies. The figures include MTNs offered by

bank holding companies but exclude deposit notes and bank notes offered by banks

because these securities are exempt from SEC registration under section 3(a)2 of the

Securities Act of 1933. The Federal Reserve collects these data to improve its 

estimates of new securities issues of U.S. corporations, as published in the Federal

Reserve Bulletin, and to improve estimates of corporate securities outstanding as shown

in the Federal Reserve’s flow of funds accounts. The Federal Reserve obtains

information on new programs from announcements of SEC Rule 415 registrations and

contacts with MTN agents. It regards as confidential the disaggregated information

provided by individual companies.
Table 1

Gross Borrowing by U.S. Corporations in the U.S. Medium-Term Note Market

A. Millions of Dollars

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

All U.S. Corporations 13,488 19,811 23,153 30,676 34,008 46,617 72,018 74,539 86,062 87,845 98,916 93,676

Financial Corporations 12,175 16,715 20,338 22,232 26,294 29,936 45,773 50,626 57,842 70,074 79,462 81,954

 Auto Finance 6,688 8,854 9,930 6,699 8,575 9,874 12,380 13,450 10,755 11,219 11,631 8,642

 Companies

 Banking Firms 1,991 2,120 2,258 3,795 3,610 3,162 11,157 6,603 7,561 8,103 13,945 12,136

 Finance Companies 2,624 3,038 4,674 6,562 8,500 12,289 14,802 18,635 19,305 30,086 34,017 32,948 1

 Real Estate, Insurance 0 152 384 677 900 1,186 1,027 1,129 1,422 846 1,671 2,391

 and Other Financial 

 Companies

 Savings and Loans 307 1,404 1,396 2,651 2,312 25 0 67 861 500 1,285 1,518

 Securities Brokers 565 1,148 1,695 1,848 2,397 3,399 6,408 10,741 17,937 19,320 16,912 24,319

Nonfinancial 1,313 3,095 2,815 8,444 7,713 16,681 26,245 23,913 28,220 17,771 19,455 11,722

Corporations

 Electric, Gas and 143 344 494 1,485 2,706 3,221 5,143 7,535 10,858 2,523 2,732 1,877

 Water

 Manufacturing 848 2,103 1,064 2,593 2,570 6,497 12,503 9,190 8,394 6,817 7,531 5,221

 Services 191 535 691 1,926 961 1,237 2,409 1,747 3,079 3,529 4,691 3,144

 Telephone and 0 0 189 514 84 1,221 1,373 1,635 2,729 1,492 1,493 831

 Communication

 Transportation, 25 38 81 752 578 1,933 1,800 1,068 1,740 920 612 405

 Mining, and 

 Construction

 Wholesale and Retail 107 75 296 1,175 815 2,573 3,018 2,738 1,420 2,489 2,396 245

 Trade

 

 

1. Excluding auto finance companies 

 

Note: Numbers may not add due to rounding 
 

Table 1 

 

 

Gross Borrowing by U.S. Corporations in the U.S. Medium-Term Note Market

 

B. Number of Issuers

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Total

All U.S. Corporations 52 72 86 132 139 165 224 211 210 171 195 165 528

Financial 41 50 61 80 72 65 76 66 71 68 78 87 206

Corporations

 Auto Finance 3 3 3 3 3 3 2 2 3 3 3 3 3

 Companies

 Banking Firms 10 13 14 16 15 13 23 16 19 16 19 21 48

 Finance 23 20 25 30 30 37 38 31 28 27 31 33 65

 Companies1

 Real Estate, 0 5 5 9 8 5 7 10 12 11 14 18 42

 Insurance and 

 Other Financial 

 Companies

 Savings and Loans 3 7 11 18 11 1 0 1 2 1 3 2 36

 Securities Brokers 2 2 3 4 5 6 6 6 7 10 8 10 12

Nonfinancial 11 22 25 52 67 100 148 145 139 103 117 78 322

Corporations

 Electric, Gas and 1 4 5 12 25 30 44 56 60 37 42 31 96

 Water

 Manufacturing 4 10 9 21 25 41 62 51 47 39 46 29 136

 Services 3 5 7 8 7 7 10 7 7 8 7 7 19

 Telephone and 0 0 2 2 1 9 11 10 8 6 8 5 20

 Communication

 Transportation, 1 2 1 5 6 8 11 8 9 7 7 3 27

 Mining, and 

 Construction

 Wholesale and 2 1 1 4 3 5 10 13 8 6 7 3 24

 Retail Trade

1. Excluding auto finance companies 
Table 2

Medium-Term Notes Outstanding

A. Millions of Dollars

Year-End

1991 1992 1993 1994 1995 1996

All U.S. Corporations 142,416 176,855 210,894 235,485 267,501 287,324 

Financial Corporations 89,823 108,277 125,404 145,858 171,096 194,536

 Auto Finance Companies 29,526 33,657 33,270 33,753 37,076 37,541

 Banking Firms 15,794 17,988 19,558 21,468 27,964 33,569

 Finance Companies 31,645 39,306 45,257 57,686 70,542 78,197 1

 Real Estate, Insurance and Other 2,783 3,442 4,567 4,757 6,083 8,002

 Financial Companies

 Savings and Loans 1,398 805 1,002 1,250 2,255 2,670

 Securities Brokers 8,678 13,078 21,751 26,944 27,176 34,556

Nonfinancial Corporations 52,593 68,578 85,490 89,627 96,405 92,788

 Electric, Gas and Water 12,414 18,895 28,178 28,771 29,658 28,288

 Manufacturing 21,793 27,384 30,885 31,959 33,945 34,204

 Services 4,953 5,211 6,182 7,453 10,091 10,944

 Telephone and Communication 2,610 3,841 5,841 6,731 7,414 5,538

 Transportation, Mining and 4,482 5,097 6,482 6,233 6,094 5,713

 Construction

 Wholesale and Retail Trade 6,341 8,150 7,922 8,482 9,203 8,101

1. Excluding auto finance companies

Note: Numbers may not add due to rounding
Table 2

Medium-Term Notes Outstanding

B. Number of Issuers with MTNs Outstanding

Year-End

1991 1992 1993 1994 1995 1996

All U.S. Corporations 315 354 367 376 401 411

Financial Corporations 114 119 115 114 121 126

 Auto Finance Companies 3 3 3 3 3 3

 Banking Firms 29 29 32 30 31 32

 Finance Companies 45 47 47 48 47 46 1

 Real Estate, Insurance and Other 13 17 17 18 24 29

 Financial Companies

 Savings and Loans 18 17 9 5 6 6

 Securities Brokers 6 6 7 10 10 10

Nonfinancial Corporations 201 235 252 262 280 285

 Electric, Gas and Water 62 74 83 83 90 91

 Manufacturing 85 99 104 111 117 117

 Services 14 13 13 13 14 14

 Telephone and Communication 14 16 16 17 17 18

 Transportation, Mining and 15 16 19 19 21 23

 Construction

 Wholesale and Retail Trade 11 17 17 19 21 22

1. Excluding auto finance companies
Table 3

Net Borrowing in the Medium-Term Note Market

(Millions of Dollars)

Year-Over-Year Change in Outstandings

1991 1992 1993 1994 1995 1996

All U.S. Corporations 42,375 34,440 34,039 24,592 32,015 19,823

Financial Corporations 20,677 18,454 17,127 20,454 25,238 23,440

 Auto Finance Companies 5,115 4,131 -387 483 3,323 465

 Banking Firms 6,766 2,194 1,569 1,910 6,496 5,605

 Finance Companies 6,897 7,661 5,950 12,429 12,856 7,655 1

 Real Estate, Insurance and Other 694 660 1,125 190 1,326 1,919

 Financial Companies

 Savings and Loans -2,727 -593 197 248 1,005 415

 Securities Brokers 3,932 4,401 8,673 5,194 231 7,380

Nonfinancial Corporations 21,699 15,985 16,912 4,138 6,777 -3,616

 Electric, Gas and Water 4,631 6,481 9,283 593 887 -1,370

 Manufacturing 10,840 5,591 3,501 1,074 1,986 259

 Services 1,424 259 971 1,270 2,639 852

 Telephone and Communication 1,034 1,232 2,000 890 684 -1,876

 Transportation, Mining and 1,210 614 1,385 -249 -139 -381

 Construction

 Wholesale and Retail Trade 2,560 1,809 -228 560 721 -1,102

1. Excluding auto finance companies

Note: Numbers may not add due to rounding
Table 4

Statistics on Firm-Level Outstandings of

Corporate Medium-Term Notes

(Millions of Dollars)

Average Outstandings Median Outstandings

 1991 1992 1993 1994 1995 1996 1991 1992 1993 1994 1995 1996

All U.S. Corporations 452 500 575 626 667 699 153 167 200 200 200 210

Financial Corporations 788 910 1,090 1,279 1,414 1,544 233 229 260 346 394 323

 Auto Finance 9,842 11,219 11,090 11,251 12,359 12,514 9,837 10,851 13,660 15,575 15,769 15,653

 Companies

 Banking Firms 545 620 611 716 902 1,049 225 150 225 355 400 323

 Finance Companies 703 836 963 1, 202 1,501 1,700 350 444 442 477 621 851 1

 Real Estate, 214 202 269 264 253 276 129 133 200 169 121 163

 Insurance and 

 Other Financial 

 Companies

 Savings and Loans 78 47 111 250 376 445 50 25 26 16 105 135

 Securities Brokers 1,446 2,180 3,107 2,694 2,718 3,456 1,028 1,316 3,396 2,242 2,575 3,656

Nonfinancial 262 292 339 342 344 326 130 157 198 183 185 176

Corporations

 Electric, Gas and 200 255 339 347 330 311 103 165 185 200 197 208

 Water

 Manufacturing 256 277 297 282 290 292 124 140 193 170 160 150

 Services 354 401 476 573 721 782 238 300 248 299 345 503

 Telephone and 186 240 365 396 436 308 148 198 192 198 219 198

 Communication

 Transportation, 299 319 341 328 290 248 210 174 189 159 145 110

 Mining and 

 Construction

 Wholesale and Retail 576 479 466 446 438 368 165 150 245 250 250 166

 Trade

1. Excluding auto finance companies.
Table 5

Ratings Distribution of Medium-Term Note Issuance

A. Millions of Dollars

Moody’s 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Total

Rating

Aaa 789 1,585 2,651 2,644 1,635 4,250 2,966 4,091 9,274 10,358 4,740 45,194

Aa 10,117 11,908 10,129 9,722 14,920 5,441 6,381 4,840 5,292 7,965 12,011 114,405

A 6,607 7,469 11,735 16,333 23,731 51,589 50,652 57,800 58,600 65,440 60,910 420,004

Baa 1,799 1,919 5,596 5,098 6,331 10,585 13,807 17,759 13,926 14,452 15,126 109,695

Ba 498 273 565 109 0 145 732 1,573 618 573 757 6,725

B 0 0 0 0 0 1 0 0 134 128 131 393

Note: Numbers may not add due to rounding

B. Number of Issuers

Moody’s Rating 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Total

Aaa 7 14 21 14 6 9 9 8 3 2 3 47

A 24 26 22 18 25 27 23 25 14 19 17 96

A 34 38 59 71 92 136 111 115 107 119 96 282

Baa 11 13 29 36 48 59 69 64 50 53 50 190

Ba 1 1 2 2 0 2 7 8 5 4 3 19

B 000001002113
Table 6

Ratings Distribution of Medium-Term Notes Outstanding

(Millions of Dollars)

Year-End Outstandings Net change

Moody’s Rating 1992 1993 1994 1995 1996 1992 1993 1994 1995 1996

All U.S. 176,857 210,895 235,486 267,501 287,324 34,439 34,039 24,591 32,014 19,824

Corporations

 Aaa 6,077 8,799 12,725 17,021 13,599 -638 2,722 3,926 4,296 -3,422

 Aa 13,137 12,860 15,686 22,984 38,027 4,384 -277 2,826 7,298 15,043

 A 89,514 122,544 142,543 161,758 168,488 -11,344 33,030 19,999 19,214 6,731

 Baa 64,621 62,232 59,603 61,040 61,449 41,794 -2,388 -2,630 1,437 409

 Ba 3,005 3,637 4,136 3,723 4,638 448 632 500 -412 914

 B 53 373 343 500 635 -130 320 -30 157 135

 Caa or lower 450 450 450 450 450 -75 0000

Financial 108,277 125,404 145,858 171,097 194,535 18,455 17,126 20,454 25,237 23,440

Corporations

 Aaa 4,930 7,570 12,130 16,621 13,045 -579 2,640 4,560 4,491 -3,576

 Aa 6,596 4,853 9,747 16,185 30,771 3,309 -1,744 4,895 6,438 14,586

 A 55,668 81,172 96,965 107,663 119,131 -13,488 25,504 15,792 10,698 11,468

 Baa 40,042 30,596 25,839 29,410 30,337 30,067 -9,446 -4,757 3,570 928

 Ba 989 1,213 1,177 1,218 1,251 -724 224 -36 40 34

 B 52 0 0 0 0 -130 -52 0 0 0

 Caa or lower 0000000000

Nonfinancial 68,580 85,490 89,628 96,404 92,788 15,986 16,912 4,138 6,777 -3,616

Corporations

 Aaa 1,147 1,229 595 400 554 -58 81 -634 -195 154

 Aa 6,541 8,007 5,939 6,799 7,256 1,076 1,467 -2,068 861 457

 A 33,846 41,371 45,579 54,095 49,357 2,144 7,526 4,207 8,516 -4,738

 Baa 24,579 31,636 33,763 31,630 31,111 11,727 7,058 2,127 -2,133 -519

 Ba 2,016 2,424 2,959 2,506 3,387 1,172 408 536 -453 881

 B 1 373 343 500 635 0 372 -30 157 135

 Caa or lower 450 450 450 450 450 -75 0000

Note: Numbers may not add due to rounding
Table 7

Ratio of Medium-Term Note Issuance to the

Sum of Medium-Term Note and Corporate Bond Issuance

for Investment-Grade Issuers1

(Percent)

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

All U.S. Corporations 17 15 23 31 33 42 41 37 35 54 47 43

Financial Corporations 35 31 36 42 44 58 57 57 51 63 59 57

 Auto Finance 46 46 54 62 61 73 74 73 62 73 77 81

 Companies

 Banking Firms 22 14 15 28 33 58 64 32 27 34 40 30

 Finance Companies 35 33 33 40 40 50 48 62 65 69 65 72 2

 Real Estate, Insurance 0 8 9 19 38 85 38 36 17 21 20 19

 and Other Financial 

 Companies

 Savings and Loans 21 6 56 40 36 3 0 8 45 49 72 89

 Securities Brokers 27 38 73 58 46 67 54 69 65 84 75 76

Nonfinancial 3 4 7 20 18 28 27 21 21 35 26 16

Corporations

 Electric, Gas and 2 2 4 11 24 26 27 18 21 23 24 23

 Water

 Manufacturing 3 7 6 14 13 22 25 21 23 49 27 15

 Services 13 19 38 49 56 46 61 40 48 58 45 36

 Telephone and 0 0 9 47 3 25 20 19 13 25 15 12

 Communication

 Transportation, Mining, 3 1 6 42 15 37 26 18 16 10 8 4

 and Construction

 Wholesale and Retail 4 2 9 34 29 45 34 29 16 43 35 4

 Trade

1. In the ratio, the volume of issuance of MTNs and corporate bonds does not include convertible bonds, Federal agency bonds, asset-backed securities, or private

placements.

2. Excluding auto finance companies.
Table 8

Ratio of Medium-Term Notes Outstanding to the

Sum of Medium-Term Notes and Corporate Bonds Outstanding

(Percent)

1991 1992 1993 1994 1995 1996

All U.S. Corporate MTNs and Bonds 14 16 17 19 19 18

All U.S. Corporate MTNs and Bonds 17 19 21 23 23 22

with Investment-Grade Ratings

Source: Moody’s Investors Service for corporate bond outstandings. Both Moody’s and Federal Reserve figures exclude private placements, asset-backed

securities, bonds issued by Federal agencies, Eurobonds, and Yankee bonds. Moody’s figures include convertible bonds.