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2004
      Complete report (41 KB PDF) 
      
    Medium-Term Notes (MTNs) outstanding at the end of 2004 totaled $639 billion, 
      up from $556 billion in 2003 (table 1). The growth of MTNs outstanding exceeded 
      that of corporate bonds, and the ratio of MTNs outstanding to the sum of 
      MTNs and bonds outstanding increased from 12 percent to 13 percent. Outstandings 
      at financial corporations continued to trend up and were $90 billion higher 
      than in 2003. The largest increase was again at non-auto finance companies, 
      where outstandings rose more than $40 billion; the second-largest increase 
      was $29 billion in the "other" category, which consists of insurance and 
      real estate firms and miscellaneous investing institutions. Most other financial 
      sectors also showed an increase in MTNs outstanding; the exceptions were 
      the auto finance and commercial bank sectors. In contrast to outstandings 
      at financial corporations, those at nonfinancial corporations decreased 
      $6 billion, continuing the downward trend from their peak in 1999. Among 
      nonfinancial firms, the levels of outstandings declined slightly across 
      the board.Despite the overall increase in outstandings, the total number of MTN 
      programs continued to decrease in 2004, falling to 440, the lowest number 
      since 1997 (table 2). The number of financial MTN programs rose from 185 
      in 2003 to 198 in 2004, mostly because of increases in asset-backed and 
      other financial institutions. However, the number of nonfinancial MTN programs 
      fell sharply, from 257 in 2003 to 242 in 2004, the lowest number recorded. 
      The largest decreases, at 5 programs each, were in the manufacturing and 
      the electric, gas, and water categories. Since 1993, manufacturing has lost, 
      on balance, 18 programs, the most of any nonfinancial sector.By rating, AAA-rated MTNs outstanding recorded the largest net increase 
        in 2004, and the vast majority of total MTNs outstanding continued to 
        be rated investment grade (those rated BBB or higher) (table 3). Outstanding 
        speculative-grade MTNs (those rated BB or lower and those not rated) increased 
        slightly but accounted for only 3 percent of total outstandings.
      As is consistent with the increase in MTNs outstanding, gross issuance 
        remained elevated at $295 billion in 2004 (table 4). In the financial 
        sector, gross issuance by commercial banks and asset-backed firms decreased 
        $40 billion collectively, but the increase in issuance by the finance 
        companies, securities brokers, and firms in the "other" category more 
        than made up for the difference. Gross issuance by nonfinancial corporations 
        continued to slide, falling 50 percent from the level in 2003, to about 
        $7 billion.
      The total number of issuers of MTNs fell from 141 in 2003 to 132 in 
        2004, mainly because of the sharp decline in the number of nonfinancial 
        issuers (table 5). On net, there were 9 more financial issuers in 2004 
        than in 2003. In particular, a rise in the number of issuers in the asset-backed 
        and the "other" categories--an increase of 15--offset the 6 fewer issuers 
        in the commercial banking sector. The number of issuers in other financial 
        groups remained stable. The number of MTN issuers in the nonfinancial 
        sector fell by 18 in 2004. The manufacturing and the electric, gas, and 
        water groups lost roughly half of their total number of issuers from the 
        previous year. The ratings distribution of MTN issuance in 2004 was similar 
        to that of MTNs outstanding (table 6). Investment-grade firms accounted 
        for the majority of the issuance, while speculative-grade firms accounted 
        for only 3 percent of total MTN issuance.
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Last update: August 31, 2005
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