U.S. companies have sold more than $245 billion — or almost aquarter of all bonds issued this year — in only seven weeks. Andinvestors can't get enough, driving down borrowing costs for eventhe junk-rated issuers to 14-month lows.

“To borrow a phrase from a couple great singers in history, it'sfeeling a little bubblelicious in the credit markets,” Mike Swell,co-head of global portfolio management for fixed income at GoldmanSachs Asset Management, said in an interview on Bloomberg TV.

With the month not even half over, more than $30 billion inissuance this week has already cemented August as the busiest since2010 for debt sales by blue-chip companies, according to datacompiled by Bloomberg. The high-yield market is also showing signsof life, with junk-rated companies selling more than $11 billion ofnotes this month, compared with $14.5 billion in July.

Bond sales are booming as investors around the world seek refugefrom central bank stimulus spanning Europe to Japan. Easy-moneypolicies got another boost when the Bank of England cut interestrates last week and expanded quantitative easing to help supportthe U.K. economy following Britain's vote to leave the EU. Withabout $12 trillion of debt yielding negative, investors arestreaming into the U.S. in search for income.

“It's challenging out there,” said Gautam Khanna, a moneymanager at Insight Investment Management, which oversees $137billion of fixed-income assets. “We're trying to balance how muchcredit risk we want to take with the demands for income andyield.”

Companies that sold bonds this week include drugmaker Amgen Inc.and hospital operator HCA Holdings Inc.

Defaults Rise

Junk bond sales are up just when the default rate for the past12 months rose to 5.1 percent in July from 4.9% in June, accordingto Fitch Ratings. Energy companies, which have defaulted on $45.5billion in bonds over the past 12 months, make up 60% of alldefaults, according to a report by Fitch analysts Eric Rosenthal,Michael Paladino and Sharon Bonelli.

“Over the last year or so, energy really has been the big themethat we have been discussing,” Rosenthal said in an interview.“It's pretty much driving all the defaults.”

Moody's Investors Service and S&P Global Ratings have alsowarned that the high-yield default rate is climbing. The risk isbeing exacerbated by yield hungry investors who are acceptingincreasingly weak protections, Moody's said in its midyear reporton North American high-yield covenants.

“People want more and more yield,” Swell said. “This rush indemand for yield is something that will last, and will work, untilit doesn't work anymore, and like we saw pre-financial crisis, issomething that doesn't end very well.”

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