Bond boom gathers pace as big firms tap markets for finance

Tim Wallace
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BRITAIN’S largest firms are issuing increasing levels of bonds, Bank of England figures showed yesterday, illustrating the sharp shift away from bank debt towards the markets.

Corporate bond issuance came in just shy of £70bn in 2012, according to the Asset Purchase Facility (APF) quarterly report, from under £40bn in 2011 and under £30bn in 2010. That compares with steady falls in bank lending to small and large firms – net lending to large firms fell £18.1bn in the four quarters to September 2012, while SME lending dipped £6.4bn.

The report also showed the Bank of England sold £55m of corporate bonds in the fourth quarter and has £35m remaining. It has bought £375bn in gilts in total, with the last purchases in October.