A big increase in asset-backed security issuance helped overall bond issuance rise slightly last year to $5.52 trillion compared to $5.49 trillion in 2004. The Bond Market Association said ABS issuance hit a record $1.1 trillion last year, besting the previous record of $901.5 billion set in 2004. U.S. Treasury issuance, federal agency issuance and corporate bond issuance were all lower last year.
ABS issuance was driven by home equity loan ABS, which increased by 7%, and auto sector issuance, which at $88.7 billion increased 29.7% from 2004. The increase was the result of higher auto sales last year and the securitization funding at GM and Ford following their downgrades.
Corporate issuance last year declined because of companies' ability to generate liquidity through profits and cash flow, the association said. In 2005 corporate issuance was $678.2 billion, down 6.8% from 2004.