Sales of corporate bonds in the U.S. reached an all-time high this month, with phone companies Verizon Communications Inc. and Sprint Corp. leading offerings of about $193.7 billion.
Verizon issued $49 billion on Sept. 11 in the biggest corporate bond deal ever while Overland Park, Kansas-based Sprint raised $6.5 billion on Sept. 4 in the largest high-yield sale since 2008, according to data compiled by Bloomberg. Offerings broke the previous monthly record of $177.3 billion set in September 2012.
Borrowers flocked to the market ahead of a Sept. 18 statement by the Federal Reserve in which economists surveyed by Bloomberg expected the central bank would announce a tapering of its $85 billion in monthly bond purchases. Following the Fed’s surprise decision to leave the program untouched, yields on the Bank of America Merrill Lynch U.S. Corporate & High Yield Index dropped to a six-week low of 4.05 percent yesterday.
“Issuers are saying ‘let’s strike now because we have the wind at our back,’” Timothy Cox, executive director of debt capital markets at Mizuho Securities USA Inc. in New York, said in a telephone interview. “There’s no reason to wait.”
BHP Billiton, the world’s biggest mining company, issued $5 billion as it led dollar sales of $16.2 billion today, the second-busiest day for offerings in about four months, Bloomberg data show.
Yields from the most creditworthy to the riskiest U.S. borrowers declined from a 15-month high of 4.37 percent on Sept. 5, index data show. Yields touched an unprecedented low of 3.35 percent on May 2.
Sales of investment-grade securities reached at least $148.8 billion this month, compared with a monthly average of $85 billion during the past three years, while offerings of speculative-grade bonds reached at least $44.8 billion, compared with an average of $27 billion, Bloomberg data show.
Offerings in the U.S. have reached $1.18 trillion this year, up from the $1.07 trillion issued in the similar period of 2012, Bloomberg data show.