Outlook for corporate bonds broadly positive

The widely forecast slowdown in corporate bond issuance in the final quarter of 1999 failed to materialise. Instead, ongoing merger and acquisition activity in a wide variety of sectors fuelled a continued requirement for companies to raise money. Meanwhile, receding millennium bug fears further encouraged the issue of corporate paper. With the UK's inverted yield curve adding to the attraction of sterling-denominated bond issuance, the flow of new issues has continued unabated. At the same time, the government's excellent funding position has meant that gilts have been in short supply in...