SABMiller Plc is selling bonds in euros for the first time inthree years as companies from G4S Plc to TeliaSonera AB tap intoEurope's credit-market rally.

The world's second-biggest brewer is issuing benchmark notes dueJanuary 2020, according to people familiar with the deal. Debtissuance will top at least 16.4 billion euros ($21.3 billion) thisweek, the busiest since Sept. 16 and above the year's weeklyaverage of 14 billion euros.

Companies are taking advantage of a rally that pushed the costof insuring the region's bank debt to near the lowest in 16 monthsas they raise funds before the holiday period. Corporate bonds inEurope yield a record low 2.2 percent, Bank of America MerrillLynch's EMU Corporate index shows.

“These are the last weeks before the holidays, so the lastchance to issue this year,” said Harold Van Acht, senior creditanalyst at Kempen Capital Management NV in Amsterdam. “Bothabsolute yield and credit spread levels are generally attractivefor issuers and investors still want to put cash to work.”

London-based SABMiller last sold bonds in euros in July 2009when it raised 1 billion euros of notes due January 2015 priced toyield 170 basis points more than the benchmark swaps rate,according to data compiled by Bloomberg. The new notes are beingmarketed with a spread of 70 to 75 basis points.

TeliaSonera, Sweden's largest telephone company, is raising 400million pounds of bonds due in 30 years, its first deal in thecurrency, at a spread of 135 basis points more than gilts,according to people familiar with the transaction. British securityprovider G4S is marketing 500 million euros of six-year bonds at167 basis points to 180 basis points more than swaps

Also in the market for the first time is German power companyBilfinger, which is selling 500 million euros of seven-year bondsthat will yield 115 basis points more than swaps. The securitieswere initially marketed with a spread of about 135 basispoints.

Bonds of Spanish utilities Iberdrola SA and Gas Natural SA werethe best performers today in Bank of America Merrill Lynch's EMUCorporates Non-Financials index. The yield on Bilbao-basedIberdrola's 4.125 percent notes due 2020 fell 12.3 basis points to250 basis points more than benchmark German government debt. That'sthe smallest gap since March 23. The spread on Gas Natural's 5.125percent 2021 notes shrank seven basis points to 384.

Credit-Default Swaps

Credit-default swaps insuring Spanish government debt fell 12.5basis points to 277, approaching the lowest level in 16 months.Contracts on Italy dropped 11 basis points to 236, the lowest sinceOct. 18.

The Markit iTraxx Financial Index linked to senior debt of 25European banks and insurers dropped four basis points to 161 at10:30 a.m. in London, approaching the lowest in 16 months. Thesubordinated index fell five basis points to 283.

The Markit iTraxx Crossover Index of swaps on 50 companies withmostly junk credit ratings declined 12 basis points to 498. TheMarkit iTraxx Europe Index of contracts on 125 companies withinvestment-grade ratings dropped 2.5 basis points to 123.

A basis point on swaps contract a protecting 10 million euros ofdebt from default for five years is equivalent to 1,000 euros ayear. The derivatives pay the buyer face value in exchange for theunderlying securities or the cash equivalent should a borrower failto adhere to its debt agreements.

Bloomberg News

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.