Corporate Medium-Term Notes, 1998

 U.S. corporations issued $150 billion of medium-term notes (MTNs) in 1998, a sharp

increase from $114 billion in 1997 (table 1.A). Issuance by financial firms reached nearly

$130 billion in 1998, and issuance by financial firms rose to $20 billion. A total of 145

firms sold MTNs in 1998, down from 158 in 1997 (table 1.B). Year-end MTNs

outstanding rose $62 billion in 1998, to $380 billion (tables 2.A and 3). The increase was

largely accounted for by the $56 billion rise in outstandings at financial firms, to nearly

$300 billion. Outstandings for nonfinancial firms increased $6 billion, to $81 billion,

after having declined for the previous two years.

 The rating of borrowers in the corporate MTN market has always been predominantly

investment-grade (tables 5 and 6). As in 1997, roughly 99 percent of total MTN issuance

had a rating of Baa or better (table 5.A). Single-A-rated issuers were again the most

common, accounting for 58 percent of total gross issuance, down from 60 percent in

1997. The share of issuers with a AA rating remained stable at 25 percent. Only one

issuer had a speculative-grade credit rating last year (table 5.B).

 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). For all U.S. corporations, this measure of share was 43 percent in 1998,

down from 47 percent in 1997 (table 7); for financial firms, it was 61 percent, down only

slightly from 62 percent in 1997; and for nonfinancial firms, it was 15 percent, down

substantially from 20 percent in 1997. Similarly, the ratio of outstanding MTN debt as a

share of total corporate outstanding debt (MTNs plus corporate bonds) declined slightly

over the year, from 19 percent to 15 percent (table 8).
Table 1

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

A. Millions of Dollars

__________________________________________________________________________________________________________________

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

__________________________________________________________________________________________________________________

All U.S. Corporations 30,676 34,008 46,617 72,018 74,539 86,062 87,845 98,916 93,676 114,437 149,219

Financial Corporations 22,232 26,294 29,936 45,773 50,626 57,842 70,074 79,462 81,954 98,879 128,524

Auto Finance Companies 6,699 8,575 9,874 12,380 13,450 10,755 11,219 11,631 8,642 12,076 19,732

Banking Firms 3,795 3,610 3,162 11,157 6,603 7,561 8,103 13,945 12,136 14,815 19,057

Finance Companies* 6,562 8,500 12,289 14,802 18,635 19,305 30,386 34,017 32,948 31,969 43,393

Real Estate, Insurance 677 900 1,186 1,027 1,129 1,422 846 1,671 2,391 3,646 5,483

and Other Financial

Companies

Savings and Loans 2,651 2,312 25 0 67 861 500 1,285 1,518 180 100

Securities Brokers 1,848 2,397 3,399 6,408 10,741 17,937 19,320 16,912 24,319 36,192 40,759

Nonfinancial Corporations 8,444 7,713 16,681 26,245 23,913 28,220 17,771 19,455 11,722 15,578 20,695

Electric, Gas and 1,485 2,706 3,221 5,143 7,535 10,858 2,523 2,732 1,877 2,765 3,198

Water

Manufacturing 2,593 2,570 6,497 12,503 9,190 8,394 6,817 7,531 5,221 6,321 9,213

Services 1,926 961 1,237 2,409 1,747 3,079 3,529 4,691 3,144 4,187 6,837

Telephone and 514 84 1,221 1,373 1,635 2,729 1,492 1,493 831 838 395

Communication

Transportation, 752 578 1,933 1,800 1,068 1,740 920 612 405 177 111

Mining, and

Construction

Wholesale and Retail 1,175 815 2,573 3,018 2,738 1,420 2,489 2,396 245 1,270 941

Trade

__________________________________________________________________________________________________________________

* Excluding auto finance companies

Note. Numbers may not add up due to rounding

Data source changed between 1996 and 1997
Table 1

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

B. Number of Issuers

__________________________________________________________________________________________________________________

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

__________________________________________________________________________________________________________________

All U.S. Corporations 132 139 165 224 211 210 171 195 165 158 145

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

Auto Finance Companies 3 3 3 2 2 3 3 3 3 5 6

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

Finance Companies* 30 30 37 38 31 28 27 31 33 33 23

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

and Other Financial

Companies

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

Securities Brokers 4 5 6 6 6 7 10 8 10 11 9

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

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

Water

Manufacturing 21 25 41 62 51 47 39 46 29 20 26

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

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

Communication

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

Mining, and

Construction

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

Trade

__________________________________________________________________________________________________________________

* Excluding auto finance companies

Note. Numbers may not add up due to rounding

Data source changed between 1996 and 1997
Table 2

Medium-Term Notes Outstanding

A. Millions of Dollars

__________________________________________________________________________________________________

1991 1992 1993 1994 1995 1996 1997 1998

__________________________________________________________________________________________________

All U.S. Corporations 142,416 176,855 210,894 235,485 267,501 287,324 317,516 379,747

Financial Corporations 89,823 108,277 125,404 145,858 171,096 194,536 242,685 298,482

Auto Finance Companies 29,526 33,657 33,270 33,753 37,076 37,541 39,573 48,004

Banking Firms 15,794 17,988 19,558 21,468 27,964 33,569 41,103 55,987

Finance Companies* 31,645 39,306 45,257 57,686 70,542 78,197 83,141 98,852

Real Estate, Insurance 2,783 3,442 4,567 4,757 6,083 8,002 12,628 21,839

and Other Financial

Companies

Savings and Loans 1,398 805 1,002 1,250 2,255 2,670 490 340

Securities Brokers 8,678 13,078 21,751 26,944 27,176 34,556 65,639 73,460

Nonfinancial Corporations 52,593 68,578 85,490 89,627 96,405 92,788 74,832 81,265

Electric, Gas and 12,414 18,895 28,178 28,771 29,658 28,288 21,788 23,550

Water

Manufacturing 21,793 27,384 30,885 31,959 33,945 34,204 25,405 28,353

Services 4,953 5,211 6,182 7,453 10,091 10,944 10,365 11,681

Telephone and 2,610 3,841 5,841 6,731 7,414 5,538 6,335 6,072

Communication

Transportation, 4,482 5,097 6,482 6,233 6,094 5,713 4,028 4,040

Mining, and

Construction

Wholesale and Retail 6,341 8,150 7,922 8,482 9,203 8,101 6,909 7,568

Trade

__________________________________________________________________________________________________

* Excluding auto finance companies

Note. Numbers may not add up due to rounding

Data source changed between 1996 and 1997
Table 2

Medium-Term Notes Outstanding

B. Number of Issuers with MTNs Outstanding

__________________________________________________________________________________________

1991 1992 1993 1994 1995 1996 1997 1998

__________________________________________________________________________________________

All U.S. Corporations 315 354 367 376 401 411 448 427

Financial Corporations 114 119 115 114 121 126 175 168

Auto Finance Companies 3 3 3 3 3 3 8 7

Banking Firms 29 29 32 30 31 32 39 35

Finance Companies* 45 47 47 48 47 46 69 64

Real Estate, Insurance 13 17 17 18 24 29 39 41

and Other Financial

Companies

Savings and Loans 18 17 9 5 6 6 4 3

Securities Brokers 6 6 7 10 10 10 16 18

Nonfinancial Corporations 201 235 252 262 280 285 273 259

Electric, Gas and 62 74 83 83 90 91 86 85

Water

Manufacturing 85 99 104 111 117 117 97 93

Services 14 13 13 13 14 14 19 16

Telephone and 14 16 16 17 17 18 22 20

Communication

Transportation, 15 16 19 19 21 23 24 23

Mining, and

Construction

Wholesale and Retail 11 17 17 19 21 22 25 22

Trade

__________________________________________________________________________________________

* Excluding auto finance companies

Note. Numbers may not add up due to rounding

Data source changed between 1996 and 1997
Table 3

Net Borrowing in the Medium-Term Note Market

__________________________________________________________________________________________

1991 1992 1993 1994 1995 1996 1997 1998

__________________________________________________________________________________________

All U.S. Corporations 42,375 34,440 34,039 24,592 32,015 19,823 30,192 62,231

Financial Corporations 20,677 18,454 17,127 20,454 25,238 23,440 48,149 55,797

Auto Finance Companies 5,115 4,131 -387 483 3,323 465 2,032 8,431

Banking Firms 6,766 2,194 1,569 1,910 6,496 5,605 7,534 14,884

Finance Companies* 6,897 7,661 5,950 12,429 12,856 7,655 4,944 15,711

Real Estate, Insurance 694 660 1,125 190 1,326 1,919 4,626 9,211

and Other Financial

Companies

Savings and Loans -2,727 -593 197 248 1,005 415 -2,180 -150

Securities Brokers 3,932 4,401 8,673 5,194 231 7,380 31,083 7,821

Nonfinancial Corporations 21,699 15,985 16,912 4,138 6,777 -3,616 -17,965 6,433

Electric, Gas and 4,631 6,481 9,283 593 887 -1,370 -6,500 1,762

Water

Manufacturing 10,840 5,591 3,501 1,074 1,986 259 -8,799 2,948

Services 1,424 259 971 1,270 2,639 852 -579 1,316

Telephone and 1,034 1,232 2,000 890 684 -1,876 797 -263

Communication

Transportation, 1,210 614 1,385 -249 -139 -381 -1,685 12

Mining, and

Construction

Wholesale and Retail 2,560 1,809 -228 560 721 -1,102 -1,192 659

Trade

__________________________________________________________________________________________

* Excluding auto finance companies

Note. Numbers may not add up due to rounding

Data source changed between 1996 and 1997
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 1998

__________________________________________________________________________________________

All U.S. Corporations 452 500 575 626 667 699 709 889

Financial Corporations 788 910 1,090 1,279 1,414 1,544 1,387 1,777

Auto Finance Companies 9,842 11,219 11,090 11,251 12,359 12,514 4,947 6,858

Banking Firms 545 620 611 716 902 1,049 1,054 1,596

Finance Companies* 703 836 963 1,202 1,501 1,700 1,205 1,547

Real Estate, Insurance 214 202 269 264 253 276 324 533

and Other Financial

Companies

Savings and Loans 78 47 111 250 376 445 150 113

Securities Brokers 1,446 2,180 3,107 2,694 2,718 3,456 4,102 4,081

Nonfinancial Corporations 262 292 339 342 344 326 274 314

Electric, Gas and 200 255 339 347 330 311 253 280

Water

Manufacturing 256 277 297 282 290 292 262 304

Services 354 401 476 573 721 782 546 691

Telephone and 186 240 365 396 436 308 288 320

Communication

Transportation, 299 319 341 328 290 248 168 176

Mining, and

Construction

Wholesale and Retail 576 479 466 446 438 368 276 330

Trade

__________________________________________________________________________________________

* Excluding auto finance companies

Note. Data source changed between 1996 and 1997
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 1998

__________________________________________________________________________________________

All U.S. Corporations 152 167 200 200 200 210 200 211

Financial Corporations 233 229 260 346 394 323 300 340

Auto Finance Companies 9,837 10,851 13,660 15,575 15,769 15,653 922 2,310

Banking Firms 225 150 225 355 400 323 407 463

Finance Companies* 350 444 442 477 621 851 504 475

Real Estate, Insurance 129 133 200 169 121 163 150 150

and Other Financial

Companies

Savings and Loans 50 25 26 16 105 135 105 100

Securities Brokers 1,028 1,316 3,396 2,242 2,575 3,656 1,433 1,090

Nonfinancial Corporations 130 157 198 183 185 176 150 170

Electric, Gas and 103 165 185 200 197 208 160 198

Water

Manufacturing 124 140 193 170 160 150 138 150

Services 238 300 248 299 345 503 224 199

Telephone and 148 198 192 198 219 198 157 188

Communication

Transportation, 210 174 189 159 145 110 96 75

Mining, and

Construction

Wholesale and Retail 165 150 245 250 250 166 172 200

Trade

__________________________________________________________________________________________

* Excluding auto finance companies

Note. Data source changed between 1996 and 1997
Table 5

Ratings Distribution of Medium-Term Note Issuance

A. Millions of Dollars

_____________________________________________________________________________________

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

_____________________________________________________________________________________

AAA 1,635 1,635 4,250 2,966 4,091 9,274 10,358 4,740 2,065 10,021

AA 14,920 14,920 5,441 6,381 4,840 5,292 7,965 12,011 28,688 37,148

A 23,731 23,731 51,589 50,652 57,800 58,600 65,440 60,910 68,080 86,054

Baa 6,331 633 10,585 13,807 17,759 13,926 14,452 15,126 14,361 15,887

Ba 0 0 145 732 1,573 618 573 757 266 159

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

_____________________________________________________________________________________

Note. Numbers may not add up due to rounding

Note. Data source has changed between 1996 and 1997
Table 5

Ratings Distribution of Medium-Term Note Issuance

B. Number of Issuers

_____________________________________________________________________________________

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

_____________________________________________________________________________________

AAA 14 6 9 9 8 3 2 3 3 3

AA 18 25 27 23 25 14 19 17 28 21

A 71 92 136 111 115 107 119 96 89 84

Baa 36 48 59 69 64 50 53 50 39 36

Ba 2 0 2 7 8 5 4 3 2 1

B 0 0 1 0 0 2 1 1 4 0

_____________________________________________________________________________________

Note. Data source has changed between 1996 and 1997
Table 6

Ratings Distribution of Medium-Term Notes

(Millions of Dollars)

A. Year-end Outstandings

__________________________________________________________________________

1993 1994 1995 1996 1997 1998

__________________________________________________________________________

All U.S. Corporations 210,894 235,485 267,501 287,324 317,516 379,747

AAA 8,799 12,725 17,021 13,599 10,732 15,948

AA 12,860 15,686 22,984 38,027 65,233 88,662

A 122,544 142,543 161,758 168,488 186,203 213,057

Baa 62,232 59,603 61,040 61,449 47,283 56,776

Ba 3,637 4,136 3,723 4,638 3,178 3,502

B 373 343 500 635 1,956 1,422

Other 0 0 0 0 2,931 380

Financial Corporations 125,404 145,858 171,096 194,536 242,685 298,482

AAA 7,570 12,130 16,621 13,045 9,753 15,271

AA 4,853 9,747 16,185 30,771 58,779 81,278

A 81,172 96,965 107,663 119,131 153,287 164,271

Baa 30,596 25,839 29,410 30,337 26,389 35,235

Ba 1,213 1,177 1,218 1,251 537 787

B 0 0 0 0 1,905 1,381

Other 0 0 0 0 1,913 260

Nonfinancial Corporations 85,490 89,627 96,405 92,788 74,832 81,265

AAA 1,229 595 400 554 999 677

AA 8,007 5,939 6,799 7,256 6,370 7,384

A 41,371 45,579 54,095 49,357 42,910 48,787

Baa 31,636 33,763 31,630 31,111 20,844 21,541

Ba 2,424 2,959 2,506 3,387 2,641 2,715

B 373 343 500 635 51 41

Other 0 0 0 0 1,018 120

__________________________________________________________________________

Note. Numbers may not add up due to rounding

Data source changed between 1996 and 1997
Table 6

Ratings Distribution of Medium-Term Notes

B. Net Change

__________________________________________________________________________

1993 1994 1995 1996 1997 1998

__________________________________________________________________________

All U.S. Corporations 34,039 24,592 32,015 19,823 30,192 62,231

AAA 2,722 3,926 4,296 -3,422 -2,867 5,216

AA -277 2,826 7,298 15,043 27,206 23,429

A 33,030 19,999 19,215 6,730 17,715 26,854

Baa -2,389 -2,629 1,437 409 -14,166 9,493

Ba 632 499 -413 915 -1,460 324

B 320 -30 157 135 1,321 -534

Other 0 0 0 0 0 -2,551

Financial Corporations 17,127 20,454 25,238 23,440 48,149 55,797

AAA 2,640 4,560 4,491 -3,576 -3,292 5,518

AA -1,743 4,894 6,438 14,586 28,008 22,499

A 25,504 15,793 10,698 11,468 34,156 10,984

Baa -9,446 -4,757 3,571 927 -3,948 8,846

Ba 224 -36 41 33 -714 250

B -52 0 0 0 1,905 -524

Other 0 0 0 0 0 -1,653

Nonfinancial Corporations 16,912 4,138 6,777 -3,616 -17,965 6,433

AAA 82 -634 -195 154 445 -322

AA 1,466 -2,068 860 457 -886 1,014

A 7,525 4,208 8,516 -4,738 -6,447 5,877

Baa 7,057 2,127 -2,133 -519 -10,267 697

Ba 408 535 -453 881 -746 74

B 372 -30 157 135 -584 -10

Other 0 0 0 0 0 -898

__________________________________________________________________________

Note. Numbers may not add up due to rounding

Data source changed between 1996 an 1997
Table 7

Ratio of Medium-Term Note Issuance to the 

Sum of Medium-Term Note and Corporate Bond Issuance

for Investment-Grade Issuers

(percent)

__________________________________________________________________________________________________________________

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

__________________________________________________________________________________________________________________

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

Financial Corporations 42 44 58 57 57 51 63 59 57 62 61

Auto Finance Companies 62 61 73 74 73 62 73 77 81 71 76

Banking Firms 28 33 58 64 32 27 34 40 30 47 53

Finance Companies* 40 40 50 48 62 65 69 65 72 73 63

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

and Other Financial

Companies

Savings and Loans 40 36 3 0 8 45 49 72 89 12 400

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

Nonfinancial Corporations 20 18 28 27 21 21 35 26 16 18 15

Electric, Gas and 11 24 26 27 18 21 23 24 23 20 15

Water

Manufacturing 14 13 22 25 21 23 49 27 15 18 20

Services 49 56 46 61 40 48 58 45 36 38 37

Telephone and 47 3 25 20 19 13 25 15 12 13 2

Communication

Transportation, 42 15 37 26 18 16 10 8 4 2 1

Mining, and

Construction

Wholesale and Retail 34 29 45 34 29 16 43 35 4 15 8

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 1998

__________________________________________________________________________________________________

All U.S. Corporate MTNs and Bonds 14 16 17 19 19 18 19 15

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

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.