Morgan Stanley and Diageo Plc (DGE) led borrowers in the U.S. selling at least $36 billion of bonds this week, the busiest in five periods, as relative yields narrowed.
Morgan Stanley, owner of the world’s biggest brokerage, issued $3.65 billion in four parts and London-based Diageo sold $3.25 billion in its first issue in almost a year, according to data compiled by Bloomberg. Offerings rose 22 percent from last week’s $29.5 billion and were the most since $47.3 billion in the five days ended March 22.
The extra yield investors demand to own corporate bonds rather than government debentures fell to 212 basis points yesterday from 216 basis points on April 19, according to Bank of America Merrill Lynch index data. Yields decreased to a record-low 3.41 percent from 3.45 percent.
Morgan Stanley (MS) issued five-year notes split between a $2.5 billion, 2.125 percent portion yielding 145 basis points more than similar-maturity Treasuries and a $700 million floating- rate piece yielding 128 basis points more than the three-month London interbank offered rate, Bloomberg data show. Libor is a rate at which banks say they can borrow from each other.
The remaining portions were add-ons to existing debt of the New York-based bank due February 2016, including $150 million of 1.75 percent notes at a relative yield of 118 basis points and $300 million of floating-rate debt, Bloomberg data show. A basis point is 0.01 percentage point.
Diageo, the world’s biggest distiller, issued $750 million of 0.625 percent, three-year debt at a 35 basis-point spread to benchmarks, $650 million of 1.125 percent, five-year notes at 55 basis points, $1.35 billion of 2.625 percent, 10-year securities at 95 and $500 million of 3.875 percent, 30-year debt at 105, Bloomberg data show.
Issuers planning sales include CompuCom Systems Inc. with a $250 million offering of eight-year notes and Suzlon Energy Ltd. with a $650 million deal, Bloomberg data show.
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