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What are the requirements, and who can issue bonds? (private and public examples) continued

Entities issuing bonds must disclose financial information to regulators, rating agencies, and investors. Bond issuers appoint investment banks as “underwriters” to help them meet these requirements, drawing on their expertise of bond markets, government regulations, and other related factors.

Government Bonds

A bond issued by a public governmental entity, such as a city or state, to finance its activities is commonly referred to as a municipal bond. For example, in December 2014, the Bay Area Toll Authority in northern California issued bonds in the amount of US$811.4 million. The bonds have b een assigned an “AA/Stable” rating by a credit agency, Standard & Poor’s. The bonds’ proceeds will be used to finance and refinance the construction, improvement, and equipping of the bridges and toll roads in the San Francisco Bay Area. ("San Francisco Bay Area Toll Bridge Revenue Bonds," Bay Area Toll Authority, Dec. 9, 2014)

Corporate Bonds

A bond issued by a company is referred to as a corporate bond. Corporate bonds can either be designed for institutional investors (insurance companies, banks, hedge funds, and the like) or retail investors. For example, in late 2014, heart-rhythm device maker Medtronic Inc. issued a US$17 billion corporate bond to help fund its acquisition of a surgical gear maker. (Medtronic, “Medtronic Prices $17 Billion in Private Placement of Senior Notes," press release, Dec. 1, 2014)

Multilateral Development Bank Bonds

Other types of issuers include multilateral development banks (MDBs) and other supranationals or international agencies. For example, the World Bank, an MDB that issued its first bond in 1947, recently issued a landmark US$4 billion 10-year transaction, raising funds from different types of investors all over the world. (World Bank Treasury, “World Bank Raises USD 4 Billion in a Landmark 10-Year Global Bond," press release, Nov. 18, 2014).