A Special Background Report On Trends in Industry And Finance
CORPORATE BOND ISSUES soar, with yearly volume estimated at $96 billion.</br></br>Company treasurers issue a flood of new debt to take advantage of sharp declines in interest rates, making 1985 a record year. Some $5.5 billion in new bonds came to market the week of Dec. 9 alone, making it "the largest volume ever done in a single week," says Bob Scott of Morgan Stanley. Major issuers are industrial companies, banks and finance companies, with 22% of the market captured by traditional long-term bonds, says James McKeon of Salomon Brothers. That's up from only 10% last year.</br></br>Yields on most taxable bonds are the lowest since 1979, with many medium-term issues piercing the 10% barrier. "That is very significant psychologically," says Robert Almon of General Motors Acceptance Corp., a large issuer. Many say the rush to market, slowed by the holidays, isn't over yet, since some predict rates will head back up next year.</br></br>"When something happens to make people think they have missed the bottom, that will stampede them into the market," says Morgan Stanley's Mr. Scott.</br></br>SOME CAR LOANS stretch to seven years, but most lenders resist the trend.