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Novartis, Harley-Davidson Lead $16 Billion of U.S. Bond Issuance

Novartis AG (NOVN) and Harley-Davidson Inc. (HOG) led borrowers raising at least $16 billion in the busiest day in more than a week for company bond sales in the U.S.

Novartis, Europe’s largest drugmaker by revenue, issued $2 billion in its first sale in more than two years and Milwaukee- based Harley-Davidson offered $600 million of three-year notes for the first time, according to data compiled by Bloomberg. Sales are the most since $20.6 billion on Sept. 10 and compare with a daily average this year of $5.9 billion.

Borrowers are raising debt after central banks in the U.S. and Europe took actions to stabilize the economy and curb bond yields. Sales are now at the fastest pace on record for the month, with issuance already exceeding September 2011 levels.

“We all expected September to be a very big month and this is a follow-up to what we’ve seen over the past two weeks,” Vincent Murray, head of the U.S. fixed-income syndicate at Mizuho Securities USA in New York, said in a telephone interview. “There’s opportunistic issuance going on.”

Yields on bonds from the most creditworthy to the riskiest borrowers reached 3.772 percent yesterday, a record low, according to the Bank of America Merrill Lynch U.S. Corporate & High Yield Master index. The extra yield investors demand to own corporate bonds rather than government debentures reached 241 basis points, or 2.41 percent, the lowest since June 2011.

Novartis Offering

Novartis sold $1.5 billion of 2.4 percent, 10-year debentures to yield 68 basis points more than similar-maturity Treasuries and $500 million of 3.7 percent, 30-year bonds at a relative yield of 80 basis points, Bloomberg data show.

The sale is the Basel, Switzerland-based company’s first since March 2010, when it issued $5 billion in three parts, Bloomberg data show. JPMorgan Chase & Co. and Morgan Stanley managed today’s sale.

Harley-Davidson, the biggest U.S. motorcycle maker, sold 1.15 percent debentures at a spread of 85 basis points, Bloomberg data show. The company last issued debt in January, selling $400 million of 2.7 percent, five-year notes, and has not previously sold three-year debt, the data show.

Issuance this month totals at least $105 billion, more than the $74.4 billion sold in all of September 2011, Bloomberg data show.

ING Bank NV issued three-year fixed- and floating-rate notes totaling $2 billion, Duke Energy (DUK) Corp. sold $650 million of 4 percent, 30-year debt and Kohl’s Corp. (KSS) offered $350 million of 3.25 percent bonds maturing in February 2023, Bloomberg data show.

To contact the reporter on this story: Sarika Gangar in New York at sgangar@bloomberg.net;

To contact the editor responsible for this story Alan Goldstein at agoldstein5@bloomberg.net;

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