US Corporate Debt Sales see Record First Half
Late-June deals by Apple and Oracle Corp, which completed a US$10bn bond sale earlier this week, helped push the number of debt sales by highly rated US companies to record levels in the first six months of 2014, according to Dealogic.
Collectively they sold about a total of US$642bn of debt over the period according to the data provider Dealogic, whose records go back to 1995. That figure compared with US$560bn sold in H113 and exceeds the previous record set in 2009, when US$612bn of bonds was sold.
The high level of issuance partly reflects low yields in the US Treasury market, to which corporate bond prices are pegged. It had been expected by investors and analysts that Treasury yields would rise in line with stronger US economic growth. Instead, they have fallen as the US economy unexpectedly contracted in the first quarter of 2014, thus making it less expensive for companies to borrow.
Dealogic’s figures for H114 show that this week’s US$10bn deal by Oracle was the second-largest investment-grade offering in the US, followed by an US$8.5 billion deal from Brazil’s oil giant Petrobras Global Finance; an US$8bn deal from Cisco Systems and a US$7.6bn deal from Bank of America.
The report follows separate figures from The Mergermarket Group, showing that H114 was the most active for
US merger and acquisition (M&A) deals