2012 was a record year for retail bond issuance. With retail bonds defined to include senior and subordinated debt and hybrid notes, A$13 billion of bonds were offered to retail investors.This compares with patchy issuance in previous years that would not have amounted to more than A$1 billion or $2 billion in any one year, and in most years a lot less. The rush of issuance was brought on by the willingness of rating agencies to give equity credit to corporates for hybrid issues, and banks needing to increase capital to meet Basel III requirements.Retail investors accommodated the issuance as they switched from equities to high yielding alternatives.MYOB and Bank of Queensland issues rounded out the year. MYOB sold A$155 million worth of subordinated bonds and BoQ sold A$300 million of hybrid notes.On Friday, the Treasurer, Wayne Swan, released an exposure draft detailing changes to the Corporations Act, the Corporations Amendment (Simple Corporate Bonds and Other Measures) Bill 2013. The legislation is intended to further encourage the development of the retail corporate bond market.Among other things, the draft legislation provides for the use of a two-part prospectus (a base prospectus that is less than three years old and a shorter offer document) and reduces directors' liabilities. As previously noted, these changes will make absolutely no difference to the development of the retail market, at least in the short term.Companies and directors are more than willing to produce and sign off on full prospectuses when they want retail investors to buy high yield, high risk subordinated and hybrid notes. And, if investors are interested in lower yielding senior ranking debt, corporate bonds do not offer the returns available from bank term deposits that come with a government guarantee.