Procter & Gamble Co. obtained a 2.3 percent interest rate onits $1 billion of 10-year notes issued yesterday, a record low forthe maturity, as corporate bond sales climbed to the most in almostthree months.

P&G, the world's largest consumer-products company, alsosold $1 billion of two-year, floating-rate notes, according to datacompiled by Bloomberg. Offerings in the U.S. reached $17.6 billion,the most since $21.2 billion was sold Nov. 7, as InternationalBusiness Machines Corp. issued $2.5 billion of debt and PetroleosBrasileiro SA raised $7 billion.

Issuers are seeking to lock in falling yields oninvestment-grade corporate bonds as Europe's debt crisis fuelsdemand for the relative safety of dollar-denominated securities andconfidence builds that the region's struggles won't disrupt arecovery in the world's largest economy. January sales fell 19percent from a year earlier to $102.6 billion, leaving investorseager to spend cash on offerings, said Adrian Miller, fixed- incomestrategist at GMP Securities LLC.

The market for new issues “will remain quite active barring adisruption with the capital markets from Europe,” Miller, who'sbased in New York, wrote in an e-mail. “Issuers are activelyseeking very attractive financing terms.”

Yields have fallen to 3.55 percent, the lowest level sincetouching 3.53 percent on Aug. 10, and within 10 basis points of arecord low 3.45 on Aug. 4, according to the Bank of America MerrillLynch U.S. Corporate Master Index. The extra yield investors demandto own the debt instead of Treasuries is hovering at about thenarrowest since November.

Cincinnati-based P&G's $2 billion offering was split evenlybetween the 2.3 percent notes that yield 55 basis points more thansimilar-maturity Treasuries and floating-rate securities due inFebruary 2014 that pay 8 basis points less than the three-monthLondon interbank offered rate, Bloomberg data show. Libor, the rateat which banks say they can borrow from each other, was set at 0.54percent today.

IBM, based in Armonk, New York, issued $1.5 billion ofthree-year, 0.55 percent notes that yield 42 basis points more thansimilar-maturity Treasuries and $1 billion of five-year, 1.25percent debt that pays a 62 basis-point spread, Bloomberg datashow. A basis point is 0.01 percentage point.

Petrobras sold $1.25 billion of three-year notes, $1.75 billionof five-year debt, $2.75 billion of securities due in 2021 and$1.25 billion of bonds maturing in 2041, Bloomberg data show. Thesale is the biggest ever by a Brazilian company and matches thelargest corporate bond offering in the U.S. this year.

Rabobank Nederland NV, Praxair Inc., Ventas Inc., and KB Homewere also among companies marketing debt in the U.S. today.

Bloomberg News

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