This research aims to assess the impact of real earnings management to bond yield spread and also the impact of institutional owners as a moderating variable. This research uses corporate bonds that was issued between 2011 up to 2015. The regression method used is GLS. Real earnings management is measured through Roychowdhurry’s (2006) proxy. Real earnings management doesn’t impact bond yield spreads. However, majority component of real earnings management impact bond yield spread. The components of real earnings management are sales manipulation, overproduction, and discretionary expense cutting. Discretionary expense cutting positively impact bond yield spreads. On the other hand, overproduction negatively impact bond yield spreads. Sales manipulation doesn’t impact earnings management. Institutional ownership is found to moderate the impact of real earnings management to bond yield spreads. An increase in institutional ownership will reduce the impact of real earnings management to bond yield spreads.