Corporate Medium-Term Notes, 1997

U.S. corporations issued $114.4 billion of medium-term notes (MTNs) in 1997, up from $93.7

billion in 1996 (table 1.A). The faster pace of issuance is mainly attributable to financial firms,

which sold $98.9 billion in 1997, $16.9 billion more than in 1996. Issuance by nonfinancial firms

also increased, but by only $3.9 billion. A total of 158 firms sold MTNs in 1997, down from 165

in 1996 (table 1.B). During 1997, total MTNs outstanding rose $30.2 billion, to $317.5 billion

(tables 2.A and 3). This increase was more than accounted for by financial firms, for which

outstandings increased $48.2 billion, to $242.7 billion. Outstandings for nonfinancial firms fell

$18.0 billion, to $74.8 billion.

Corporations that issued MTNs in 1997 continued to have good credit ratings (table 5.A). 

As in 1996, almost 99 percent of the total amount of MTNs issued had an investment-grade rating

of Baa or better. Single-A-rated issuers were again the most common, and their issuance

accounted for 60 percent of total gross issuance, down from 65 percent in 1996. Issuers with a

AA rating saw their share of gross issuance rise, from 13 percent to 25 percent. Only six issuers

had a speculative-grade credit rating last year (table 5.B). As the amount of speculative-grade

issuance has always been small, outstanding MTN debt is predominantly investment grade (table

6.A). 

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

percent of total public issuance of investment-grade debt (MTNs plus corporate bonds). As shown

in table 7, in 1997 this share was 47 percent for all U.S. corporations, with a higher share of 62

percent for financial firms and a lower share of 18 percent for nonfinancial firms. For both
2 Board of Governors of the Federal Reserve System

financial and nonfinancial firms the MTN share increased from 1996 levels. Similarly, the ratio of

outstanding MTN debt as a percent of total corporate outstanding debt (MTNs plus corporate

bonds) edged up, from 18 percent to 19 percent (table 8). 
Table 1

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

A. Millions of Dollars

__________________________________________________________________________________________________________________

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

__________________________________________________________________________________________________________________

All U.S. Corporations 23,153 30,676 34,008 46,617 72,018 74,539 86,062 87,845 98,916 93,676 114,437

Financial Corporations 20,338 22,232 26,294 29,936 45,773 50,626 57,842 70,074 79,462 81,954 98,879

Auto Finance Companies 9,930 6,699 8,575 9,874 12,380 13,450 10,755 11,219 11,631 8,642 12,076

Banking Firms 2,258 3,795 3,610 3,162 11,157 6,603 7,561 8,103 13,945 12,136 14,815

Finance Companies* 4,674 6,562 8,500 12,289 14,802 18,635 19,305 30,386 34,017 32,948 31,969

Real Estate, Insurance 384 677 900 1,186 1,027 1,129 1,422 846 1,671 2,391 3,646

and Other Financial

Companies

Savings and Loans 1,396 2,651 2,312 25 0 67 861 500 1,285 1,518 180

Securities Brokers 1,695 1,848 2,397 3,399 6,408 10,741 17,937 19,320 16,912 24,319 36,192

Nonfinancial Corporations 2,815 8,444 7,713 16,681 26,245 23,913 28,220 17,771 19,455 11,722 15,578

Electric, Gas and 494 1,485 2,706 3,221 5,143 7,535 10,858 2,523 2,732 1,877 2,765

Water

Manufacturing 1,064 2,593 2,570 6,497 12,503 9,190 8,394 6,817 7,531 5,221 6,321

Services 691 1,926 961 1,237 2,409 1,747 3,079 3,529 4,691 3,144 4,187

Telephone and 189 514 84 1,221 1,373 1,635 2,729 1,492 1,493 831 838

Communication

Transportation, 81 752 578 1,933 1,800 1,068 1,740 920 612 405 177

Mining, and

Construction

Wholesale and Retail 296 1,175 815 2,573 3,018 2,738 1,420 2,489 2,396 245 1,270

Trade

__________________________________________________________________________________________________________________

* Excluding auto finance companies

Note. Numbers may not add up due to rounding

Data source has changed since 1996
Table 1

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

B. Number of Issuers

__________________________________________________________________________________________________________________

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

__________________________________________________________________________________________________________________

All U.S. Corporations 86 132 139 165 224 211 210 171 195 165 158

Financial Corporations 61 80 72 65 76 66 71 68 78 87 84

Auto Finance Companies 3 3 3 3 2 2 3 3 3 3 5

Banking Firms 14 16 15 13 23 16 19 16 19 21 20

Finance Companies* 25 30 30 37 38 31 28 27 31 33 33

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

and Other Financial

Companies

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

Securities Brokers 3 4 5 6 6 6 7 10 8 10 11

Nonfinancial Corporations 25 52 67 100 148 145 139 103 117 78 74

Electric, Gas and 5 12 25 30 44 56 60 37 42 31 32

Water

Manufacturing 9 21 25 41 62 51 47 39 46 29 20

Services 7 8 7 7 10 7 7 8 7 7 6

Telephone and 2 2 1 9 11 10 8 6 8 5 4

Communication

Transportation, 1 5 6 8 11 8 9 7 7 3 4

Mining, and

Construction

Wholesale and Retail 1 4 3 5 10 13 8 6 7 3 8

Trade

__________________________________________________________________________________________________________________

* Excluding auto finance companies

Note. Numbers may not add up due to rounding

Data source has changed since 1996
Table 2

Medium-Term Notes Outstanding

A. Millions of Dollars

_________________________________________________________________________________________

1991 1992 1993 1994 1995 1996 1997

_________________________________________________________________________________________

All U.S. Corporations 142,416 176,855 210,894 235,485 267,501 287,324 317,516

Financial Corporations 89,823 108,277 125,404 145,858 171,096 194,536 242,685

Auto Finance Companies 29,526 33,657 33,270 33,753 37,076 37,541 39,573

Banking Firms 15,794 17,988 19,558 21,468 27,964 33,569 41,103

Finance Companies* 31,645 39,306 45,257 57,686 70,542 78,197 83,141

Real Estate, Insurance 2,783 3,442 4,567 4,757 6,083 8,002 12,628

and Other Financial

Companies

Savings and Loans 1,398 805 1,002 1,250 2,255 2,670 490

Securities Brokers 8,678 13,078 21,751 26,944 27,176 34,556 65,639

Nonfinancial Corporations 52,593 68,578 85,490 89,627 96,405 92,788 74,832

Electric, Gas and 12,414 18,895 28,178 28,771 29,658 28,288 21,788

Water

Manufacturing 21,793 27,384 30,885 31,959 33,945 34,204 25,405

Services 4,953 5,211 6,182 7,453 10,091 10,944 10,365

Telephone and 2,610 3,841 5,841 6,731 7,414 5,538 6,335

Communication

Transportation, 4,482 5,097 6,482 6,233 6,094 5,713 4,028

Mining, and

Construction

Wholesale and Retail 6,341 8,150 7,922 8,482 9,203 8,101 6,909

Trade

_________________________________________________________________________________________

* Excluding auto finance companies

Note. Numbers may not add up due to rounding

Data source has changed since 1996
Table 2

Medium-Term Notes Outstanding

B. Number of Issuers with MTNs Outstanding

__________________________________________________________________________________

1991 1992 1993 1994 1995 1996 1997

__________________________________________________________________________________

All U.S. Corporations 315 354 367 376 401 411 448

Financial Corporations 114 119 115 114 121 126 175

Auto Finance Companies 3 3 3 3 3 3 8

Banking Firms 29 29 32 30 31 32 39

Finance Companies* 45 47 47 48 47 46 69

Real Estate, Insurance 13 17 17 18 24 29 39

and Other Financial

Companies

Savings and Loans 18 17 9 5 6 6 4

Securities Brokers 6 6 7 10 10 10 16

Nonfinancial Corporations 201 235 252 262 280 285 273

Electric, Gas and 62 74 83 83 90 91 86

Water

Manufacturing 85 99 104 111 117 117 97

Services 14 13 13 13 14 14 19

Telephone and 14 16 16 17 17 18 22

Communication

Transportation, 15 16 19 19 21 23 24

Mining, and

Construction

Wholesale and Retail 11 17 17 19 21 22 25

Trade

__________________________________________________________________________________

* Excluding auto finance companies

Note. Numbers may not add up due to rounding

Data source has changed since 1996
Table 3

Net Borrowing in the Medium-Term Note Market

__________________________________________________________________________________

1991 1992 1993 1994 1995 1996 1997

__________________________________________________________________________________

All U.S. Corporations 42,375 34,440 34,039 24,592 32,015 19,823 30,192

Financial Corporations 20,677 18,454 17,127 20,454 25,238 23,440 48,149

Auto Finance Companies 5,115 4,131 -387 483 3,323 465 2,032

Banking Firms 6,766 2,194 1,569 1,910 6,496 5,605 7,534

Finance Companies* 6,897 7,661 5,950 12,429 12,856 7,655 4,944

Real Estate, Insurance 694 660 1,125 190 1,326 1,919 4,626

and Other Financial

Companies

Savings and Loans -2,727 -593 197 248 1,005 415 -2,180

Securities Brokers 3,932 4,401 8,673 5,194 231 7,380 31,083

Nonfinancial Corporations 21,699 15,985 16,912 4,138 6,777 -3,616 -17,965

Electric, Gas and 4,631 6,481 9,283 593 887 -1,370 -6,500

Water

Manufacturing 10,840 5,591 3,501 1,074 1,986 259 -8,799

Services 1,424 259 971 1,270 2,639 852 -579

Telephone and 1,034 1,232 2,000 890 684 -1,876 797

Communication

Transportation, 1,210 614 1,385 -249 -139 -381 -1,685

Mining, and

Construction

Wholesale and Retail 2,560 1,809 -228 560 721 -1,102 -1,192

Trade

__________________________________________________________________________________

* Excluding auto finance companies

Note. Numbers may not add up due to rounding

Data source has changed since 1996
Table 4

Statistics on Firm-Level Outstandings of Medium-Term Notes

A. Average Outstandings in Millions of Dollars

__________________________________________________________________________________

1991 1992 1993 1994 1995 1996 1997

__________________________________________________________________________________

All U.S. Corporations 452 500 575 626 667 699 709

Financial Corporations 788 910 1,090 1,279 1,414 1,544 1,387

Auto Finance Companies 9,842 11,219 11,090 11,251 12,359 12,514 4,947

Banking Firms 545 620 611 716 902 1,049 1,054

Finance Companies* 703 836 963 1,202 1,501 1,700 1,205

Real Estate, Insurance 214 202 269 264 253 276 324

and Other Financial

Companies

Savings and Loans 78 47 111 250 376 445 150

Securities Brokers 1,446 2,180 3,107 2,694 2,718 3,456 4,102

Nonfinancial Corporations 262 292 339 342 344 326 274

Electric, Gas and 200 255 339 347 330 311 253

Water

Manufacturing 256 277 297 282 290 292 262

Services 354 401 476 573 721 782 546

Telephone and 186 240 365 396 436 308 288

Communication

Transportation, 299 319 341 328 290 248 168

Mining, and

Construction

Wholesale and Retail 576 479 466 446 438 368 276

Trade

__________________________________________________________________________________

* Excluding auto finance companies

Note. Data source has changed since 1996
Table 4

Statistics on Firm-Level Outstandings of Medium-Term Notes

B. Median Outstandings in Millions of Dollars

__________________________________________________________________________________

1991 1992 1993 1994 1995 1996 1997

__________________________________________________________________________________

All U.S. Corporations 152 167 200 200 200 210 200

Financial Corporations 233 229 260 346 394 323 300

Auto Finance Companies 9,837 10,851 13,660 15,575 15,769 15,653 922

Banking Firms 225 150 225 355 400 323 407

Finance Companies* 350 444 442 477 621 851 504

Real Estate, Insurance 129 133 200 169 121 163 150

and Other Financial

Companies

Savings and Loans 50 25 26 16 105 135 105

Securities Brokers 1,028 1,316 3,396 2,242 2,575 3,656 1,433

Nonfinancial Corporations 130 157 198 183 185 176 150

Electric, Gas and 103 165 185 200 197 208 160

Water

Manufacturing 124 140 193 170 160 150 138

Services 238 300 248 299 345 503 224

Telephone and 148 198 192 198 219 198 157

Communication

Transportation, 210 174 189 159 145 110 96

Mining, and

Construction

Wholesale and Retail 165 150 245 250 250 166 172

Trade

__________________________________________________________________________________

* Excluding auto finance companies

Note. Data source has changed since 1996
Table 5

Ratings Distribution of Medium-Term Note Issuance

A. Millions of Dollars

_____________________________________________________________________________

1989 1990 1991 1992 1993 1994 1995 1996 1997

_____________________________________________________________________________

AAA 1,635 1,635 4,250 2,966 4,091 9,274 10,358 4,740 2,065

AA 14,920 14,920 5,441 6,381 4,840 5,292 7,965 12,011 28,688

A 23,731 23,731 51,589 50,652 57,800 58,600 65,440 60,910 68,080

Baa 6,331 633 10,585 13,807 17,759 13,926 14,452 15,126 14,361

Ba 0 0 145 732 1,573 618 573 757 266

B 0 0 1 0 0 134 128 131 1,010

_____________________________________________________________________________

Note. Numbers may not add up due to rounding

Data source has changed since 1996
Table 5

Ratings Distribution of Medium-Term Note Issuance

B. Number of Issuers

_____________________________________________________________________________

1989 1990 1991 1992 1993 1994 1995 1996 1997

_____________________________________________________________________________

AAA 14 6 9 9 8 3 2 3 9,733

AA 18 25 27 23 25 14 19 17 58,864

A 71 92 136 111 115 107 119 96 143,294

Baa 36 48 59 69 64 50 53 50 26,439

Ba 2 0 2 7 8 5 4 3 537

B 0 0 1 0 0 2 1 1 1,905

_____________________________________________________________________________

Note. Numbers may not add up due to rounding

Data source has changed since 1996
Table 6

Ratings Distribution of Medium-Term Notes

(Millions of Dollars)

A. Year-end Outstandings

__________________________________________________________________________

1992 1993 1994 1995 1996 1997

__________________________________________________________________________

All U.S. Corporations 176,855 210,894 235,485 267,501 287,324 317,516

AAA 6,077 8,799 12,725 17,021 13,599 10,732

AA 13,137 12,860 15,686 22,984 38,027 65,233

A 89,514 122,544 142,543 161,758 168,488 186,203

Baa 64,621 62,232 59,603 61,040 61,449 47,283

Ba 3,005 3,637 4,136 3,723 4,638 3,178

B 53 373 343 500 635 1,956

Other 0 0 0 0 0 2,931

Financial Corporations 108,277 125,404 145,858 171,096 194,536 242,685

AAA 4,930 7,570 12,130 16,621 13,045 9,753

AA 6,596 4,853 9,747 16,185 30,771 58,779

A 55,668 81,172 96,965 107,663 119,131 153,287

Baa 40,042 30,596 25,839 29,410 30,337 26,389

Ba 989 1,213 1,177 1,218 1,251 537

B 52 0 0 0 0 1,905

Other 0 0 0 0 0 1,913

Nonfinancial Corporations 68,578 85,490 89,627 96,405 92,788 74,832

AAA 1,147 1,229 595 400 554 999

AA 6,541 8,007 5,939 6,799 7,256 6,370

A 33,846 41,371 45,579 54,095 49,357 42,910

Baa 24,579 31,636 33,763 31,630 31,111 20,844

Ba 2,016 2,424 2,959 2,506 3,387 2,641

B 1 373 343 500 635 51

Other 0 0 0 0 0 1,018

__________________________________________________________________________

Note. Numbers may not add up due to rounding

Data source has changed since 1996
Table 6

Ratings Distribution of Medium-Term Notes

B. Net Change

__________________________________________________________________________

1992 1993 1994 1995 1996 1997

__________________________________________________________________________

All U.S. Corporations 34,440 34,039 24,592 32,015 19,823 30,192

AAA -638 2,722 3,926 4,296 -3,422 -2,867

AA 4,384 -277 2,826 7,298 15,043 27,206

A -11,794 33,030 19,999 19,214 6,731 17,715

Baa 448 -2,388 -2,630 1,437 409 -14,166

Ba -130 632 500 -412 914 -1,460

B -75 320 -30 157 135 1,321

Other 0 0 0 0 0 2,931

Financial Corporations 18,454 17,127 20,454 25,238 23,440 48,149

AAA -579 2,640 4,560 4,491 -3,576 -3,292

AA 3,309 -1,744 4,895 6,438 14,586 28,008

A -13,488 25,504 15,792 10,698 11,468 34,156

Baa 30,067 -9,446 -4,757 3,570 928 -3,948

Ba -724 224 -36 40 34 -714

B -130 -52 0 0 0 1,905

Other 0 0 0 0 0 1,913

Nonfinancial Corporations 15,985 16,912 4,138 6,777 -3,616 -17,965

AAA -58 81 -634 -195 154 445

AA 1,076 1,467 -2,068 861 457 -886

A 2,144 7,526 4,207 8,516 -4,738 -6,447

Baa 11,727 7,058 2,127 -2,133 -519 -10,267

Ba 1,172 408 536 -453 881 -746

B 0 372 -30 157 135 -584

Other 0 0 0 0 0 1,018

__________________________________________________________________________

Note. Numbers may not add up due to rounding

Data source has changed since 1996
Table 7

Ratio of Medium-Term Note Issuance to the 

Sum of Medium-Term Note and Corporate Bond Issuance

for Investment-Grade Issuers

(percent)

__________________________________________________________________________________________________________________

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

__________________________________________________________________________________________________________________

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

Financial Corporations 36 42 44 58 57 57 51 63 59 57 62

Auto Finance Companies 54 62 61 73 74 73 62 73 77 81 71

Banking Firms 15 28 33 58 64 32 27 34 40 30 47

Finance Companies* 33 40 40 50 48 62 65 69 65 72 73

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

and Other Financial

Companies

Savings and Loans 56 40 36 3 0 8 45 49 72 89 12

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

Nonfinancial Corporations 7 20 18 28 27 21 21 35 26 16 18

Electric, Gas and 4 11 24 26 27 18 21 23 24 23 20

Water

Manufacturing 6 14 13 22 25 21 23 49 27 15 18

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

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

Communication

Transportation, 6 42 15 37 26 18 16 10 8 4 2

Mining, and

Construction

Wholesale and Retail 9 34 29 45 34 29 16 43 35 4 15

Trade

__________________________________________________________________________________________________________________

Note. In the ratio, the volume of MTNs and corporate bonds does not include convertible bonds, Federal agency bonds,

asset backed securites, or private placements.
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 1997

__________________________________________________________________________________________

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

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

with Investment-Grade Ratings

__________________________________________________________________________________________

Source. Moody’s Investor 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.