Corporate credit: The final frontier for central banks

Central banks are showing more interest in corporate credit. With spreads at historically tight levels, these traditionally risk-averse investors are exploring further down the credit curve in search of returns. Matthew Attwood reports on the rise of the world's central banks as the next big buyers of corporate debt

Non-US central banks and government investment bodies have dramatically upped their holdings of US corporate debt over the past four years. In 2002 and 2003, the average monthly inflow - foreign purchases of US corporate debt less US purchases of foreign corporate bonds - was $466 million and $452 million respectively, according to the US Treasury International Capital (TIC) Net Monthly Inflows report. A big jump was recorded in 2004, to $955 million, followed by another spike in 2005, when the