Australia Junk Loans Made in U.S. Surge to Record on High Yields

Australian companies borrowed a record $6.2 billion from high-yield investors in the U.S. since October as the lure of loans with looser terms offsets higher borrowing costs.

Fortescue Metals Group Ltd. increased a loan to $5 billion from $4.5 billion after failing to syndicate the facility among Asian banks. One meeting with institutional investors in New York helped Nine Entertainment Co., rated Ba2 by Moody’s Investors Service, seal a $735 million transaction. Asia-Pacific borrowers have never raised funds from speculative-grade U.S. loan investors on such a scale, according to sale arrangers UBS AG and Credit Suisse Group AG.