Sales of corporate bonds from the U.S. to Europe and Asia slumped to their lowest levels this year and borrowing costs soared to the most since February as a global slowdown curbed demand for all but the safest assets.
Deere & Co., the largest maker of agricultural equipment, and Springdale, Arkansas-based Tyson Foods Inc. led weekly sales of at least $39.5 billion, the smallest amount since the five days ended Dec. 30, according to data compiled by Bloomberg. Offerings fell below the 2012 weekly average of $76.8 billion for the fourth consecutive period as yields rose to 4.272 percent from the low this year of 4.06 percent on May 8.
Global bond offerings fell almost 25 percent from last week’s $52.8 billion, Bloomberg data show. This year, sales of $1.73 trillion have fallen behind the $1.8 trillion pace for the same period in 2011.
Tyson sold $1 billion of 4.5 percent, 10-year notes at a spread of 290 basis points on June 6, Bloomberg data show. The coupon was less than the 6.125 percent low set in January 1996 for the company’s 10-year debt, the data show. Proceeds will be used to refinance the company’s $810 million of 10.5 percent securities due March 2014, Tyson said in a June 6 statement.
“What spooks most people is the, so far, inability, after a couple of years of working groups, for Europe to come up with a fully acknowledged plan to address all of its current problems,” Malvey said.