Borrowers are offering the biggest concessions since the start of the year to sell new corporate bonds in the U.S. as Europe's sovereign-debt turmoil intensifies and signs emerge that America's economy is weakening.
Investment-grade companies paid an average of 21 basis points more in relative yields in the two weeks ended June 1 than investors accepted for their outstanding bonds with similar maturities, according to Barclays Plc data. The level, the highest since reaching 26 basis points in the week ended Jan. 6, has soared from this year's low of negative 4 in February.
Even with cash on corporate balance sheets at about record highs, investors are demanding more compensation as speculation grows that Greece may exit the 17-country euro area and U.S. employers add the fewest workers in a year. The number of credit rating downgrades in the U.S. this year exceeds upgrades at Moody's Investors Service, reversing the trend a year earlier.
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