The UK has overtaken the US as the leading global centre for international bond issuance accounting for 30 per cent of the global total during 2008. IFSL's report Bond Markets 2009 notes that the total of $718bn in international bonds issued in the UK in 2008 constituted a rise of 42 per cent on 2007. IFSL also estimates that London accounted for around 70 per cent of secondary trading in international bonds. Globally, international bond issuance fell 19 per cent in 2008 to $2.4 trillion while amounts outstanding increased 5 per cent to $23.9 trillion.

 

The report also analyses the worldwide bond market and states that the amounts outstanding on the global bond market exceeded $83 trillion in 2008, up 6% on the previous year. Domestic bond markets accounted for 71% of the total, with international bonds accounting for the remainder.

 

Europe is moving towards a more US-style bond market as companies there diversify away from reliance on banks for funding. During the first quarter of 2009, issuance of investment grade corporate bonds in Europe totalled a record €140bn, well above quarterly levels of less than €50bn seen in recent years. Financial sector bond issuance however remained subdued and was dominated by government-guaranteed issues. Unlike in the US, corporate bond issuance in Europe remains limited to those companies with the best credit ratings.