Debt financing and trading recovered impressively in the second quarter, according to the latest data from the Investment Industry Association of Canada.

The IIAC reports that total debt issuance in Canada soared to a record high of $69.8 billion in the second quarter, up more than 50% from the prior quarter, and up 37% from the same period last year.

For the first half of 2009, total debt issuance stands at $116.1 billion, up 80% from the second half of 2008.

The increase in financings was primarily propelled by government bond issuance, which rose 44% from the previous quarter and 97% from the second quarter of 2008, the IIAC says.

It notes that corporate borrowings also faired well during the quarter “signaling that credits markets have begun to slowly thaw and may be on the path to a gradual recovery.”

The IIAC also reports that total bond trading activity picked up momentum in the quarter, with trading volume up 20.2% from the first quarter.

“Trading increased across all instrument classes with corporate bonds showing the largest gain,” it says.

IE