Our study period covers the time frame 1990-2008. Data on bond and loan issues are retrieved from the databank Thomson ONE Banker. To account for the effect of interest rate changes on the issuance of bonds and loans various interest rates have been incorporated in our study. These include the 90-day Treasury-Bill rate, the 10-year constant maturity Treasury yield, and the Baa corpo-rate yield. The term spread is measured as the difference between the 10-year con-stant maturity Treasury rate and the 90-day Treasury-Bill yield, whereas the credit spread is determined as the difference between the Baa rate and the 10-year con-stant maturity Treasury rate. The total amount of bonds and loans issued in our sample is $2.67 trillion and $3.25 trillion, respectively. The largest amount of debt issued in a single year adds up to $3.22 billion in the year 2001 for bonds and $3.76 billion in the year 2007 for loans. The largest number of bond and loan issues occurred in 2008 and 2004, respectively.
Panel A of Figure 9.1 shows the average monthly amount of bonds issued compared to the mean Baa yield for the whole sample under study. Panel B com-pares the development of the Baa rates with the issuance proceeds of loans. In essence, both panels show that an increase in debt issuance (bonds or loans) coin-cides with a drop in interest rates. Both panels are characterized by considerable within-year interest rate variations and debt issuance, hence endorsing the benefit of applying monthly data to scrutinize timing attempts.
Interesting to examine seems to be the time period 2001-2004 and 2004-2007. Panel