Aug. 22 (Bloomberg) -- American Express Co. and Lincoln National Corp. are among companies selling $8 billion of bonds today, taking advantage of a revival of demand for long-term debt as borrowing costs soar for commercial paper.

American Express, the third-largest U.S. credit-card network, is seeking to raise $1.5 billion of 10-year notes. Philadelphia-based Lincoln National, the fourth-biggest U.S. life insurer, sold $300 million of five-year notes to pay down commercial paper that matures in August and September, the company said in a regulatory filing today.

Fourteen companies announced bond sales this week as investors' appetite for investment-grade bonds rises. Companies are finding it harder to sell commercial paper, which matures in 270 days or less, after buyers in that market fled. A global debt rout spread to asset-backed commercial paper and short-term debt sold by lower-rated sellers, shutting them out of the market. That helped prompt companies like Lincoln National to raise money in the bond market.

``The majority of issuers are eyeing what's going on in some of these other ancillary markets and getting a little nervous with the credit crunch,'' said Jeff Houston, who helps manage $19 billion of fixed-income assets at American Century Investments in Mountain View, California. For those wanting to sell debt with longer maturities, ``the opportunity is there to issue in the market because it has steadied somewhat.''

American Express spokesman Robert Glick said the New York- based company doesn't comment on its debt strategy.

XTO Energy Inc. reopened a bond sale yesterday, raising $1 billion to pay down commercial paper, according to a regulatory filing. Fort Worth, Texas-based XTO yesterday sold five-year, 10- year and 30-year bonds.

`Relatively Attractive'

In some cases, selling commercial paper maturing in 30 days is more expensive than offering five-year debt.

So-called dealer placed commercial paper with 30-day maturities and rated A2 by Standard & Poor's and P2 by Moody's Investors Service yesterday yielded 6.06 percent, according to Federal Reserve data. That compares with an average yield of 5.643 percent for five-year maturity debt issued by A rated companies, based on Merrill Lynch & Co. indexes. A BBB rated borrower would have paid 6.14 percent for five-year debt.

``It has become relatively attractive for corporate issuers to refinance commercial paper with bonds,'' Bank of America Corp.'s analysts, led by Jeffrey Rosenberg in New York, said in a report yesterday. ``Issuers may face the choice between uncertain financing in the CP market and more stable five-plus year fixed rate financing in the high grade bond market at similar yields.''

Deutsche, Merrill

Deutsche Bank AG, Germany's biggest bank, and Merrill Lynch, the third-largest U.S. securities firm, are other investment- grade borrowers tapping the market today. Frankfurt-based Deutsche Bank is offering $3 billion of 10-year notes.

Merrill Lynch, based in New York, sold $2.75 billion of 6.4 percent notes due in 2017. Bethesda, Maryland-based Coventry Health Care Inc., the U.S. provider of medical insurance that last month announced plans to buy Florida Health Plan Administrators LLC, raised $400 million of notes due in 2014.

Investment-grade borrowers have sold $64.8 billion of bonds so far this month, up 75 percent from total sales in July, according to data compiled by Bloomberg.

``The calendar for investment-grade issuers will be there in some size unless things become more volatile again,'' Houston said.

To contact the reporter on this story: Fabio Alves in New York at Falves3@bloomberg.net;

Last Updated: August 22, 2007 16:48 EDT