Corporate Bond Market Size, Share & Industry Analysis, By Type (Investment Grade and High-Yield), By Issuer Type (Large Corporate, SMEs/Private Issuers, and Startups Issuing Through Private Placement), By Term/Duration (Short-term (<3 years), Medium-term (3-7 years), and Long-term (>7 years)), By Sector (Financial Institutions, Energy & Power, High Technology, Healthcare, and Others), and Regional Forecast, 2025 – 2032

The global corporate bond market size was valued at USD 37.58 trillion in 2024. The market is projected to grow from USD 57.99 trillion in 2025 to USD 81.78 trillion by 2032, exhibiting a CAGR of 10.3% during the forecast period.

A corporate bond is a type of debt security issued by a corporation to investors to raise capital for business needs such as operations, expansion, or acquisitions. It defines a legal responsibility by the corporation to repay the principal amount on a definite maturity date. In return, the bondholder accepts regular interest payments, known as coupons, typically semiannually. Corporate bonds are traded in the secondary market and vary in maturity, credit risk, and yield. The issuer's creditworthiness affects the bond's interest rate and investor demand.

The corporate bond market is mainly driven by increasing capital requirements of companies to fund expansion, and infrastructure investments. Rising investor demand for fixed-income securities and stability, particularly during periods of equity market volatility. Additionally, favorable interest rate environments and supportive monetary policies boost corporations to raise funds through bonds, thereby propelling the market growth.

Corporate bond issuers including JPMorgan Chase & Co., Goldman Sachs Group, Inc., and Morgan Stanley implement multiple strategies, such as managing refinancing risks and timing, to diversify maturity profiles in the market. For instance, JPMorgan Chase & Co. is a global financial services firm that underwrites and trades corporate bonds. The other issuers may also pursue credit rating upgrades to lower borrowing costs and attract institutional investors.

The COVID-19 pandemic caused major disruptions in the market, leading to a widened yield spreads and liquidity crisis in early 2020. Economic shutdowns and investor uncertainty prompted a sharp decline in demand. Central banks, particularly the Federal Reserve, intervened by purchasing corporate bonds to stabilize the market. This support helped restore investor confidence and facilitated a market recovery in the latter half of 2020.

IMPACT OF GENERATIVE-AI

Rising Adoption of Gen-AI by Multiple Trading Platforms will Help Market Growth

Generative AI transforms the market by defining credit risk modeling, powering document analysis (e.g., bond prospectuses), and creating real-time issuer insights. Various trading platforms integrate Generative AI capabilities into their systems to remain competitive. These advancements aim to enhance decision-making, trading efficiency, and user experience. For instance,

• In June 2024, LTX, an AI-driven corporate bond trading platform, introduced a new GenAI-powered List Trading feature. This functionality uses GPT technology to help users seamlessly create and execute multi-directional trade lists and multi-asset classes through its RFQ+ system.

The adoption of GenAI is becoming a key differentiator in the evolving financial technology landscape. Further, AI-driven chatbots also improve investor engagement and streamline bond issuance workflows.

MARKET DYNAMICS

Market Drivers

The Growth of Electronic Trading in Major Countries to Drive the Market Growth

The expansion of electronic trading is significantly advancing the global market by enhancing efficiency, increasing accessibility, and adopting higher transparency. Different market participants accept electronic platforms, allowing a wider range of individual and institutional investors to contribute to the corporate bond market.

Further, electronic trading systems simplify the trading process, by minimizing the costs and time associated with executing transactions. This improved efficiency helps traders respond more effectively to market fluctuations and results in tighter bid-ask spreads, ultimately enabling better pricing for all market participants. For instance,

• According to the industry expert, nearly USD 15.00 billion of corporate bonds were traded electronically daily in 2022.
• As per the Greenwich survey, in 2020, over 40% of investment-grade and 33% of high-yield corporate bonds are traded electronically.

The continued growth of electronic trading in major economies is helping in smooth bond transactions, increasing transparency, and growing market liquidity—collectively serving as a corporate bond market growth.

Market Restraints

Rising Credit and Default Risk by Multiple Investors Can Restrict Market Growth

Rising default and credit risks considerably restrict market growth by increasing risk premiums and reducing investor confidence. When multiple investors anticipate potential defaults, it demands higher yields, making it more expensive for companies to raise funds through bonds.

This often reduces issuance and tighter credit conditions, particularly in the high-yield segment. Small companies may face demotions, pushing them out of the shrinking eligible investor pool and investment-grade territory. These conditions boost market volatility and deter long-term investment. Ultimately, sustained credit concerns can restrict overall corporate bond market liquidity and activity.

Market Opportunities

Technological Integration Presents a Lucrative Opportunity for Market in Future

Technological integration, specifically through blockchain, AI, and electronic trading platforms, offers significant opportunities for the market. AI-powered tools develop decision-making, boost the credit risk assessment, and automate bond issuance, making the process efficient and faster.

Blockchain helps to streamline settlement processes, reducing risks and transaction costs associated with errors and fraud. These technologies increase market liquidity by connecting a broader range of institutional and retail investors and improving price transparency. For instance,

• In March 2025, the Inter-American Development Bank (IDB) issued its inaugural digital bond in pound sterling, utilizing HSBC Orion, a blockchain-based platform for digital assets. The issuance was governed by Luxembourg law, which enables the issuance, transfer, and secure holding of bonds and other securities in digital format.

These advancements also enable efficient bond pricing and facilitate cross-border trading. As a result, the market becomes more accessible, efficient, and dynamic, attracting more investors and issuers.

Corporate Bond Market Trends

Growing Demand from Foreign Investors is a Major Market Trend

The growing demand from foreign investors is emerging as a major trend in the market. As interest rates in developed countries remain low, foreign investors gradually seek higher yields from corporate bonds in other regions, specifically emerging markets. This demand is driven by better returns, search for diversification, and attractive currency exchange rates.

Additionally, the global availability of bonds through digital platforms and reduced transaction costs has facilitated foreign investments. Foreign capital inflows contribute to market liquidity, allowing companies to issue bonds at highly favorable terms. However, geopolitical risks and currency fluctuations are other factors that investors consider when allocating capital across borders. Therefore, these factors are key contributors to the market's overall growth.

SEGMENTATION ANALYSIS

By Type

Increased Low-Interest-Rate Environment Augmented High-Yield Segment Growth

Based on type, the market is divided into investment grade and high-yield.

High-yield captured the largest market share in 2024, owing to investors' search for higher returns in a low-interest-rate environment. Low default rates and economic recovery are boosting investor confidence in riskier bonds. Companies with higher control progressively turn to high-yield bonds for financing, driving the issuance. For instance,

• In 2024, according to LCD data, companies such as Royal Caribbean Cruises and US Foods raised a record of USD 109.7 billion in high-yield bonds and loans, denoting the third-largest monthly record.

Investment grade is anticipated to grow at the highest CAGR over the forecast period. It is driven by strong demand for stable returns and lower risk, particularly in uncertain economic environments. With low interest rates and economic recovery, companies with solid credit ratings increasingly issue bonds to capitalize on favorable borrowing conditions.

By Issuer Type

Strong Credit Ratings by Large Corporations Has Enhanced Segment Growth

Based on issuer type, the market is studied into large corporates, SMEs/private issuers, and startups issuing through private placement.

Large corporations captured the largest market share in 2024. Large corporations have the ability to issue bonds with favorable terms, supported by substantial market presence and strong credit ratings. These companies benefit from economies of scale, easier access to capital markets, and lower borrowing costs. Their bonds attract institutional investors seeking stable, low-risk returns. Additionally, large corporations can tap into global corporate bond markets, offering high liquidity and attracting diverse investor groups.

SMEs/private issuers are anticipated to grow at the highest CAGR during the forecast period, owing to their increasing reliance on debt financing as they expand. As traditional bank lending becomes more stringent, SMEs use corporate bonds to access capital. The growth of digital bond platforms and investor appetite for higher yields also contributes to this rise.

By Term/Duration

Rising Acceptance of Medium-Term Bonds for Its Balanced Risk-Return Profile has Accelerated Segment’s Dominance

Based on term/duration, the market is analyzed into Short-term (<3 years), Medium-term (3-7 years), and Long-term (>7 years).

Medium-term captured the largest corporate bond market share in 2024, owing to its balanced risk-return profile. It offers a favorable maturity range for issuers and investors, typically providing higher yields than short-term bonds while maintaining less interest rate risk than long-term bonds. Corporate issuers often prefer medium-term bonds to match their financing needs and investment horizons.

Short-term growth is anticipated at the highest CAGR during the forecast period, owing to their attractiveness in a rising interest rate environment. Short-term duration allows investors to minimize interest rate risk by offering quicker reinvestment opportunities. Companies also increasingly issue short-term bonds to manage liquidity needs efficiently and avoid long-term commitments.

By Sector

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Rising Need of Corporate Bonds in Financial Institutions Propelled the Segment Growth 

Based on sectors, the market is analyzed into financial institutions, energy & power, high technology, healthcare, and others.

Financial institutions captured the largest market share in 2024. Financial institutions are frequent issuers of corporate bonds, as they require funding for loans, investments, and regulatory capital reserves. The large size and scope of financial institutions make them attractive to investors seeking low-risk, liquid investments. Additionally, the diversified nature of their operations and global presence provide them access to a broad investor base, further driving their dominance in the market.

The energy & power sector is anticipated to grow at a prominent CAGR during the forecast period, owing to increasing demand for infrastructure development, renewable energy projects, and modernization of power grids. Rising capital requirements to fund large-scale projects, including energy transition and green initiatives, are driving the issuance of bonds in this sector. As governments globally introduce supportive regulations and funding for clean energy, companies in this sector are tapping into corporate bond markets for financing.

CORPORATE BOND MARKET REGIONAL OUTLOOK

Geographically, the market is divided into North America, Asia Pacific, Europe, South America and Middle East & Africa

North America

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North America dominated the market in 2024. It is primarily driven by major countries such as the U.S. and Canada, which include various issuers and investors. The market has seen significant expansion, with recent valuations reaching trillions of dollars and thousands of issuers, from major multinational corporations to smaller businesses. Key factors fueling North American market growth drivers include low interest rates, strong economic conditions, and a rising preference among corporations for debt financing over equity financing.

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The U.S. accounts for the largest share of the North American market. Many companies in the U.S. are capitalizing on the relatively low cost of borrowing, locking in attractive long-term rates. For instance, in 2024, major corporations such as Microsoft and Apple issued bonds at favorable terms to finance expansion projects.

Europe

The European market held the second-highest share in 2024. European regulators have supported corporate bond market liquidity through various initiatives, such as easing capital requirements for banks investing in corporate debt. Further, there is an increasing demand for green and ESG (Environmental, Social, and Governance) bonds as European investors prioritize sustainable investments. This trend has contributed significantly to European market growth.

Asia Pacific

Asia Pacific will grow at the highest CAGR among other regions. Strong economic growth, particularly in emerging markets such as China and India, drives corporate investment and the need for financing. As companies seek capital for expansion, M&A activities, and infrastructure projects, there is an uptick in corporate bond issuance. Major players in the technology and manufacturing sectors utilized bonds to fund their growth strategies.

Middle East & Africa

The market in the Middle East & Africa region is expanding due to economic diversification, particularly in countries such as the UAE and Saudi Arabia, which are reducing their dependence on oil revenues. Governments and corporations are issuing bonds to fund large-scale infrastructure projects, such as the Saudi Vision 2030 initiative.

South America

The South American market is growing due to increased demand for financing from local and international corporations. Key drivers include a stable macroeconomic environment, low interest rates in certain countries, and infrastructure development needs. Companies in Brazil and Argentina issued bonds to fund expansion, with a growing focus on sustainable investments.

COMPETITIVE LANDSCAPE

Key Industry Players

Broader Service Portfolio among Key Players to Propel Market Growth

The market is fragmented owing to the presence of various major players in the market. The key players are focusing on strategic partnerships, acquisitions, and developing comprehensive corporate bonds to grow their market share. These strategies include enhancing compliance, offering broader service portfolios, and expanding into new markets.

Long List of Companies Studied (including but not limited to)

• JPMorgan Chase & Co  (U.S.)
• Apple, Inc. (U.S.)
• Microsoft Corporation (U.S.)
• Amazon.com, Inc. (U.S.)
• Fidelity Investments (U.S.)
• AT&T, Inc. (U.S.)
• Unilever PLC (U.K.)
• BlackRock, Inc. (U.S.)
• Volkswagen AG (Germany)
• ExxonMobil Corporation (U.S.)
• Alibaba Group (China)
• Reliance Industries (India)
• BNP Paribas (France)
• Fiat Chrysler Automobiles (FCA) (Italy)
• Telefónica S.A. (Spain)
• Huawei Technologies Co., Ltd. (China)
• Infosys Ltd. (India)
• Airbus SE (France)
• UniCredit S.p.A. (Italy)

And Others.

KEY INDUSTRY DEVELOPMENTS

• In June 2025, Larsen & Toubro (L&T) announced a USD 5.00 billion ESG bond issuance deal, becoming the first Indian corporate to do so under the Securities and Exchange Board of India’s (SEBI) newly announced ESG and sustainability-linked bond framework.
• In May 2025, Ladder Capital Corp. announced receiving an investment-grade credit rating from Fitch Ratings. Fitch assigned a Long-Term Issuer Default Rating of 'BBB-' with a Stable outlook to its subsidiaries, Ladder Capital Finance Holdings LLLP and Ladder Capital Finance Corporation.
• In May 2025, Unilever Capital Corporation completed a USD 1.7 billion bond offering, providing the company with enhanced financial flexibility as it navigates portfolio realignments and faces ongoing competition in the beauty and personal care sector.
• In April 2025, Goldman Sachs Asset Management strengthened its European active ETF portfolio by introducing two high-yield bond strategies. This move supports its strategic expansion within the region's active ETF market. The launch of these ETFs underscores the firm's commitment to offering more tailored investment options. It further enhances Goldman Sachs' presence in the growing European active ETF space.
• In February 2025, BlackRock transformed its BlackRock High Yield Municipal Fund into an active ETF, now rebranded as the iShares High Yield Muni Active ETF. The ETF aims to offer investors high-yield, tax-exempt investment opportunities while improving flexibility and accessibility through the ETF structure.

INVESTMENT ANALYSIS AND OPPORTUNITIES

The corporate bond market presents significant investment opportunities due to its stability and predictable returns, especially in the investment-grade segment. With interest rates expected to stabilize, investors can capitalize on attractive yields, particularly in high-quality, low-risk bonds issued by top-tier companies. Emerging markets also offer higher yields, though with increased risk, providing opportunities for diversification. Additionally, green and ESG bonds are gaining higher traction, offering sustainable investment options. The market is bolstered by companies' strong balance sheets and a growing trend of refinancing debt at favorable terms, providing investors with low default risks and potential capital appreciation.

REPORT COVERAGE

The report provides a detailed market analysis and focuses on key aspects such as leading companies, issuer type, and leading sector. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the market's growth in recent years.

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REPORT SCOPE & SEGMENTATION