Using a newly comprehensive dataset that merges firm-level information with corporate bond

issuance and holdings, we show that firms strategically use bond issuance not only to minimize

their cost of capital but also to diversify their investor base. Investor specialization in certain

bond characteristics allows firms to effectively shape their bondholder composition through

issuance decisions. We find that firms with more diversified bondholder exhibit increased resilience

to credit market shocks. Our analysis underscores the dual function of market timing

in corporate bond issuance: it serves both to reduce capital costs and as a strategy for credit

supply diversification. These findings emphasize the pivotal role of financially sophisticated

firms in strategically issuing assets in a market increasingly reliant on non-bank intermediaries.