Companies sold at least $24.8 billion of bonds in the U.S., the busiest day in almost a year, with investment-grade yields at about record lows.
Royal Philips Electronics NV (PHIA), the world’s largest maker of patient-monitoring systems, issued $1.5 billion of debt in two parts yesterday, according to data compiled by Bloomberg. Bombardier Inc. (BBD/B), the Montreal-based maker of aircraft and rail equipment, sold $500 million of 5.75 percent, 10-year notes. DirecTV, the biggest U.S. satellite television service, sold $4 billion of bonds in a three-part issue.
Europe’s fiscal crisis has stoked demand for the perceived safety of dollar-denominated investments from fund managers wagering that global banking system strains won’t curb U.S. economic growth. Sales yesterday were the most since March 22, 2011, when $24.9 billion of bonds were sold in the U.S., Bloomberg data show.
“Investors have proven willing to accept new deals across the high-yield and investment-grade spectrums, and issuers are happy to take advantage of that willingness,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, wrote in an e-mail message. He cited “the drumbeat of lower and lower yields and greater and greater investor demand for corporate bonds.”
The yield on Bank of America Merrill Lynch’s U.S. Corporate Master index fell on March 2 to 3.404 percent, the least in the bank’s data going back to October 1986, before rising to 3.422 percent as of yesterday. The extra yield investors demand to hold the debt rather than Treasuries of similar maturity is 200 basis points, the least since Aug. 9.
Philips, based in Amsterdam, sold $1 billion of 3.75 percent, 10-year notes to yield 180 basis points more than similar-maturity Treasuries and $500 million of 5 percent, 30- year debt at 200 basis points, Bloomberg data show.
DirecTV (DTV) sold $1.25 billion each of 5.15 percent, 30-year bonds and 2.4 percent, five-year notes, Bloomberg data show. The El Segundo, California-based company also issued $1.5 billion of 3.8 percent, 10-year notes. UnitedHealth Group Inc. (UNH) sold $600 million of 2.875 percent, 10-year notes and $400 million of 4.375 percent, 30-year bonds.
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