Total SA and Toyota Motor Credit Corp. led at least $6.5 billion of U.S. bond offerings today as companies locked in borrowing costs hovering at about the lowest level on record.
Total, Europe’s third-largest oil producer, sold $2 billion of debt split between five-year, 1.5 percent notes and 10-year, 2.875 percent bonds, according to data compiled by Bloomberg. Toyota Motor Credit, the finance arm of Asia’s biggest automaker, sold $1.25 billion of three-year, 1 percent debt, the data show.
Rock-Tenn Co., Rite Aid Corp. and Bank of Tokyo-Mitsubishi UFJ Ltd. also issued bonds today, taking advantage of average yields that fell to a record low 4.354 percent on Feb. 10 before climbing to 4.366 percent yesterday. Including today’s offerings, sales this month of $84.4 billion compare with $83.6 billion in all of February 2011, according to data compiled by Bloomberg.
The extra yield investors demand to own company debt of all ratings instead of Treasuries has fallen to 296 basis points, or 2.96 percentage points, according to the Bank of America Merrill Lynch U.S. Corporate & High Yield Index. Spreads touched 295 basis points on Feb. 9, the narrowest in six months.
Paris-based Total’s five-year notes yield 78 basis points more than similar-maturity Treasuries and its 10-year debt pays a 95 basis-point spread, Bloomberg data show. Royal Dutch Shell Plc and BP Plc are Europe’s largest oil companies.
Toyota Motor Credit, based in Torrance, California, issued its three-year notes at a spread of 67 basis points, Bloomberg data show. Bank of Tokyo-Mitsubishi issued $1 billion of five-year, 2.35 percent notes at a 155 basis-point spread, the data show.