Who are the major players in the Bond market?


The bond market is for participants who are involved in the issue and trade debt securities. It primarily includes government-issued and corporate debt securities and can be broken down into three main groups: issuers, underwriters and buyers.

Bond Issuers

Of the Issuer to sell bonds or other debt instruments on the bond market to Finance their organizations. In this market area primarily consists of governments, banks and corporations. The biggest of these issuers is the government, which uses the bond market to Finance operations of the country, such as social programs and other necessary expenses. The government segment also includes some institutions, such as Fannie Mae, which provides mortgage-backed securities.

Banks are also key issuers in the bond market, and they can range from local banks up to supranational banks such as the European Investment Bank, which issues debt in the bond market. The last major Issuer is the corporate bond market, which issues debt to Finance corporate operations.

The Underwriters Of The Bonds

In the underwriting segment of the bond market traditionally made up of investment banks and other financial institutions that help the Issuer to sell bonds on the market. In General, sale of debt is not as easy as just take it to the market. In most cases, millions (if not billions) of dollars that are in the same sentence. As a consequence, much work needs to be done — such as creating a prospectus and other legal documents — in order to sell the issue.

In General, the need for insurers is the most difficult for the corporate debt market because there are large risks associated with this type of debt.

Buyers Of Bonds

The final players in the market are those who buy debt that is available on the market. They basically include every group mentioned as well as any other type of investors, including private. Governments play a major role in the market because they borrow and lend money to other governments and banks.

Furthermore, governments often purchase debt from other countries if they have excess reserves of that country money as a result of trade between countries. For example, China and Japan are the major holders of US government debt.

(To read more, see Basics of Federal bond basics bond.)

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