Companies Take Advantage of Low Interest Rates to Issue Bonds
Draw two bond demand - bond supply diagrams with the US Government Security market on the left-hand side and the corporate bond market on the right-hand side. Begin at a point A in both diagrams and then model the topic of this article which of course is that corporations are issuing massive amounts of bonds (near $1 trillion) to take advantage of low interest rates as point B (label the quantity of corporate bonds at point B as $1 trillion). Please explain exactly why
1) investors are willing to buy more corporate bonds as well as
2) why firms are willing to issue more corporate bonds.