Bank of America Raises Junk Bond Sales Forecast for 2010 to $240 Billion

Bank of America Merrill Lynch raised its high-yield, high-risk corporate bond issuance forecast for this year to $240 billion from $210 billion, amid a recent jump in monthly volume and a “backlog” of offerings.

The bank has recorded $176 billion of junk sales year-to- date, Bank of America Merrill Lynch Global Research credit strategists led by Oleg Melentyev in New York wrote in a report today. That’s 84 percent of its initial estimate.

“At this point, given how strong the volumes have been in recent months and with a substantial backlog of deals expected in September, we have revised our forecast further out to $240 billion,” Melentyev said in a telephone interview. “At this point, all indications are for a strong start to September, with volumes to reach $20 billion, and possibly even higher.”

Junk bonds are rated below Baa3 by Moody’s Investors Service and lower than BBB- by Standard & Poor’s.

To contact the reporter on this story: Sapna Maheshwari in New York at sapnam@bloomberg.net

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