The paper builds on and expands Barnard (2015). A relationship between the portfolio term structure and issue term structures is defined, such that the portfolio term structure is no longer directly decomposed. Rather, issue term structures are decomposed, and the portfolio term structure is derived from the issue term structures. When decomposing term structures at the issue level, minimizing the difference between modelled price and market price is replaced by an alternative objective: minimizing co-variance between issue term structures and the portfolio term structure. The model is specifically targeted at vanilla bond portfolios, or mixed bond portfolios comprising of vanilla and zero coupon bonds. It may be applied to both risk-free and risky portfolios. In particular, it should be able to adapt better to risky portfolios, known to have greater spread variance across individual issues, viz-a-viz the portfolio.The theoretical framework to accomplish issue level decompositions is subsequently delineated. The issue of negative forward rates is further examined. The model is applied to a sample of risk-free bonds, and the implications in terms of risk data are noted.