The objective of this research is to test the hypothesis of the signal on the announcement of bonds issuance and to investigate factors that affect abnormal return of shares of issuers which announce the bonds issuance. Another objective is to test the changing risk before and after the announcement of the issuance of bonds. It uses the event study method multiple regression and F test for difference in variances. The sample includes companies at the Jakarta Stock Exchange which announced issuance of bonds between year 2000-2004. The results of this research show that announcement of issuance of bond is s good news for investors and give positive abnormal return around the announcement day. These results support the performance signal theory leverage increasing finance is a good news for investors. The results also show that larger bond issuance will give signal on the management confidence that the company will provide more cashflows in the future and the rating of the bonds is used by investor as a proxy for probability of default. However it is not proven that the level of leverage is an important information used by investors. In addition the risk is not found to increase after the bond issuance.