Companies are marketing at least $18 billion of bonds in the U.S., heading for the busiest day in a month, with investment-grade yields at record lows.
Royal Philips Electronics NV, the world’s largest maker of patient-monitoring systems, plans to sell a two-part offering, according to a person familiar with the transaction, who declined to be identified because terms aren’t set. Bombardier Inc., the maker of aircraft and rail equipment, is planning to sell $500 million of 10-year notes, according to another person with knowledge of that transaction. DirecTV, the biggest U.S. satellite television service, may sell $4 billion of five-, 10- and 30-year debt.
Europe’s fiscal crisis has stoked demand for the perceived safety of dollar-denominated investments from fund managers wagering that global banking system strains won’t curb U.S. economic growth.
“Investors have proven willing to accept new deals across the high-yield and investment-grade spectrums, and issuers are happy to take advantage of that willingness,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, wrote in an e-mail message. He cited “the drumbeat of lower and lower yields and greater and greater investor demand for corporate bonds.”
The yield on Bank of America Merrill Lynch’s U.S. Corporate Master index fell on March 2 to 3.40 percent, the least in the bank’s data going back to October 1986. Relative spreads above Treasuries are at 200 basis points, the least since August.
Issuance is poised for the busiest day since Feb. 1, when companies tapped the market for $18.5 billion, data compiled by Bloomberg show.