Bond Sales of $32.7 Billion in U.S. Reach Highest in Six Weeks

March 1 (Bloomberg) -- Sales of company bonds in the U.S. rose to the highest level in six weeks as relative yields on the debt widened.

Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded copper producer, and Purchase, New York-based PepsiCo Inc. led offerings of at least $32.7 billion this week, up from $26.4 billion last week and the most since $53.3 billion in the five days ended Jan. 18, according to data compiled by Bloomberg.

The offerings broke a five-week streak in which issuance failed to reach the $28.3 billion weekly average from the past 12 months, Bloomberg data show. Sales in February totaled $109.5 billion compared with $148.3 billion in the period last year.

The extra yield investors demand to own corporate bonds rather than government debentures increased 2 basis points this week to 221 basis points, or 2.21 percentage points, as of yesterday, according to the Bank of America Merrill Lynch U.S. Corporate & High Yield index. Yields decreased 2 basis points to 3.58 percent this week.

Freeport, which is purchasing Plains Exploration & Production Co. and McMoRan Exploration Co. for about $9 billion, sold $6.5 billion of debt in four parts to help fund the acquisition, Bloomberg data show. The Phoenix-based company’s sale included $1.5 billion of 2.375 percent, five-year securities to yield 162.5 basis points more than similar-maturity Treasuries and $1 billion of 3.1 percent, seven-year debt at a relative yield of 187.5 basis points, the data show.

PepsiCo, Coca-Cola

The mining company also issued $2 billion each of 3.875 percent, 10-year notes at a 200 basis-point spread and 5.45 percent, 30-year bonds at 237.5.

PepsiCo, the world’s largest snack-food maker, issued $2.5 billion including $625 million each of three-year floating-rate notes to yield 21 basis points more than the three-month London interbank offered rate and 0.7 percent, three-year bonds to yield 35 basis points more than benchmarks, Bloomberg data show. It also sold $1.25 billion of 2.75 percent, 10-year debt at a spread of 87 basis points.

Coca-Cola Co. sold $2.5 billion of bonds in three parts yesterday in its first offering in almost a year. The issue from the world’s largest soft-drink manufacturer included $750 million of 2.5 percent, 10-year bonds at a relative yield of 67 basis points, 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;