Corporate Bond Sales Strongest Since 2009
Strong demand for fixed-income investment options and corporate debt-related exchange traded funds (ETFs) has pushed corporate bond sales to their highest level in five years, according to Standard & Poor’s (S&P) data.
More global companies turned to the international debt markets in the first half of 2014 to meet their funding needs, to take advantage of low borrowing costs in addition to investor demand.
They included companies such as Verizon, Walmar, Bayer, Cisco and Petrobras, as well as banks that included Wells Fargo, Bank of America and BNP Paribas, reports the
Collectively they sold more than US$1.8 trillion in new bonds in H114, the highest figure since H109.
notes investors have, at least temporarily, set aside any concerns over credit quality and the sensitivity of bond prices to changes in interest rates as the US Federal Reserve tapers its asset purchases.
Financial companies sold more than half of the debt, at around US$1 trillion, while non-financial companies offered US$836bn, according to S&P’s data. Most corporate borrowers had investment-grade ratings, with sales by junk-rated companies reaching US$291bn mark.
S&P also reported that European companies issued US$803bn of the global corporate bonds that came to market in H114.