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Volvo Dangles Hefty New-Bond Premium That Has Buyers Piling In

  • Firm’s five-year note draws orders for six times the deal size
  • Company slashed the spread offered in deal by 32 basis points

Volvo AB is proving that Europe’s sleepy market for new corporate-bond issues is still open -- as long as the returns are high enough to lure investors in.

Volvo Treasury AB, the financing arm of the vehicle maker and one of Sweden’s biggest corporate-bond issuers, pulled in more than 3 billion euros ($3 billion) of bids for a 500 million-euro note -- a coverage ratio of six times, according to a person with knowledge of the matter, who asked not to be identified as the information is private. The demand allowed Volvo to slash the spread offered to buyers at a time when sales of corporate debt in Europe are plunging and markets are recovering from the steep bond selloffs earlier this year.