Low interest rates pushed debt trading and issuance into record territory for the Canadian bond market during 2004, according a report from the Investment Dealers Association of Canada.

Total bond issuance jumped to a record $49 billion in the fourth quarter and $165 billion in 2004, beating the previous year’s high in 2003 by 12%.

The IDA says total bond trading also reached record terrain, with trading in the quarter up 21% to $1.4 trillion. For the year, total bond trading climbed 7% from 2003 to $5.5 trillion in 2004, just shy of the record $5.6 trillion set in 1997.

Government of Canada gross bond issuance totalled $16 billion in 31 issues in the quarter, up 10% in value from the third quarter. Total Government and Federal Crown Corporation debt financings reached $61 billion in 2004, up just 0.7% from 2003.

Trading in federal bonds totalled $1.2 trillion, up 20% from the third quarter. For the year, total trading in Government and Federal Crown Corporation bonds was near a record-high at $4.9 trillion, up 7% from 2003.

Provincial gross bond issuance totalled $9.8 billion in 69 new issues, up 28% in value from the third quarter. Total provincial financings for 2004 climbed to $39.9 billion, up 50% from 2003 levels.

Trading of provincial bonds increased 31% in the quarter to a record $113.6 billion. Provincial bond trading in 2004 was at a record $397.6 billion, up 20% over 2003.

Municipal gross bond issuance in the quarter was $1.6 billion in 97 new issues, up 82% in value over the third quarter. Total municipal financings in 2004 stood at $3.8 billion, down 28% from 2003 levels.

Corporate debt issuance skyrocketed in the quarter to a record $21 billion, up 90% over the third quarter. Corporate debt financings also set a new record for the year with $59.5 billion issues in 2004, up 10% from 2003.

Trading in corporates reached $35.8 billion in the fourth quarter, up 25% quarter-over-quarter. For the year, total corporate bond trading was at a record $225 billion, up 3% over 2003.

Trading in money market instruments was $1.0 trillion in the fourth quarter, down 3% from Q3 2004. Money market trading in 2004 rose to $4.8 trillion, up 9% from 2003.