May 2009 may have been a watershed month for the recovery of the domestic corporate bond market. This is not to say that the market has recovered, which it certainly hasn't, but some clear signals emerged that a recovery is under way. At the start of the month, following National Australia Bank's $1.6 billion non-government guaranteed bond issue, this commentator set out the key indicators that we would want to see before we could confidently say the market is indeed, recovering. The first indicator was that non-government guaranteed bond issuance would again become the norm for the banks. After NAB's issue, ANZ issued $1.0 billion of non-guaranteed bonds the very next week, and did so at a spread that was two basis points tighter, and NAB has progressively added a further $375 million to its issue, at the same spread as the ANZ. Moreover, the week before last NAB became the first of the big four to issue offshore, and in sterling, in significant volume without a guarantee.Last week, Westpac finally completed the picture with a $1.7 billion, non-guaranteed, three-year bond issue. This is the largest non-guaranteed issue yet. Even more significantly, Westpac bank was able to sell the bonds at a spread of only 120 bps. This is the first time we have been able to write 'only' in front of '120 bps' and this was the second indicator that we cited, with non-guaranteed issuance being the catalyst driving spread contraction.  It is clear that the market is now quite happy to accept the credit risk of the four majors without support from a government guarantee and competition is now driving credit spreads in: the issue was launched for a minimum of $1.0 billion.  Subject to there being no further shocks to the market, the time is at hand for the removal of the government guarantee on domestic bond issues. However, the same cannot yet be said for offshore issuance. While NAB has issued successfully offshore without a guarantee, it is too early yet to say that the banks can expect to do this on a regular basis. Moreover, NAB's issue demonstrated that doing so is much more expensive than issuing with a guarantee, even after allowing for the guarantee fee.Perhaps not surprisingly, Westpac chose to follow up its domestic issue with a US$350 million government-guaranteed bond issue in the US s144A market. The three-year bonds were priced at 39 bps over Libor.Coming back to our key indicators, the third indicator we cited builds on the first two, with issuance from the regional banks being the next event. Unfortunately, we did not see any of that during the month. However on Friday, Wide Bay Australia, a building society, launched a $25 million, ten-year non-call five, subordinated bond issue. No indicative margin was specified but the step-up is 150 per cent of the margin, if the bonds are not called.   The fourth indicator was similar to the third in that any decline in issuance from the major banks would make