Fitch Ratings: U.S. Debt Market Issuance Will Remain Strong

Business Wire, Feb 18, 2003

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 18, 2003

U.S. debt market issuance levels will remain strong, at least in the first part of 2003, as issuers attempt to evade any rate hikes that are anticipated by year-end, according to a new report detailing 2002 debt issuance published today by Fitch Ratings. The low interest rate environment lured issuers to market in 2002, especially those in the municipal market, spurred not only by inexpensive borrowing but by sizable budget deficits and dwindling tax revenues.

'Corporate issuers found themselves rushing to market to take advantage of the cheap funding rates, only to encounter friction by way of market concerns over irregular accounting practices, faltering earnings, and questions about lopsided balance sheets,' said Charlotte Needham, Associate Director, Fitch Ratings. 'For many issuers, it became tougher to access the market due to increasing investor concern over growing bond defaults and escalating corporate scandals involving companies once considered investment-grade quality.'

Issuance in the corporate investment-grade market totaled $745.7 billion for 2002, compared to $982.8 billion in 2001. High yield issuance levels totaled $57.9 billion, down from the $86.8 billion issued in 2001. Asset-backed issuance for 2002 totaled $368.5 billion, soaring over the $278.7 billion total from last year.

The new report 'Economic Weakness and Credit Quality Dictate 2002 New Issues,' is available on the Fitch Ratings web site at 'www.fitchratings.com'.