The rise in new junk bond offerings during the 1990s can be traced to more borrowing companies bypassing rigid and expensive bank loans as a source of credit and an upward surge of corporate mergers financed by junk bond issues.

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The 1990s saw an increase in junk bond offerings as companies sought alternative financing methods to traditional, more costly bank loans. This period also experienced a boom in corporate mergers and acquisitions, many of which were financed through the issuance of high-yield, high-risk junk bonds.

The Rise in New Junk Bond Offerings During the 1990s