Sanofi became the first nonfinancial private company to issuedebt that yields less than zero as the busiest year forinvestment-grade corporate bond issuance resumes.

The French drugmaker sold 1 billion euros ($1.12 billion) ofthree-year notes at a yield of minus 0.05 percentage point,according to people with knowledge of the matter. German householdproducts maker Henkel may sell 500 million euros ($558 million) oftwo-year notes also at a yield of minus 0.05 percentage point, saidthe people, who asked not to be named because the deal isprivate.

The deals come amid a flurry of planned issuance in Europe andthe U.S. Glencore, the world's biggest coal exporter, is seeking toissue seven-year euro bonds to “refinance upcoming maturities atcompetitive levels,” a spokesman said on Tuesday. Home Depot isplanning a two-part debt sale for general corporate purposes.

Borrowers are tapping debt markets on investors' first morningback at work after the summer break came to an unofficial endfollowing the Labor Day holiday in the U.S. on Monday. Companiesare on track to issue a record amount of investment-grade bonds ineuros this year after the European Central Bank increased stimulusmeasures that suppressed borrowing costs.

“There's a lot of cash to be put to work now, so, first comefirst served,” said Hyung-Ja de Zeeuw, an Amsterdam-based seniorcredit strategist at ABN Amro Bank. “You want to be in the firstround of deals.”

Officials at Paris-based Sanofi and Dusseldorf, Germany-basedHenkel weren't immediately available to comment on the sales.

Euro Sales

Nonfinancial companies including Telefonica SA and Coca-Cola Co.have sold almost 190 billion euros of bonds this year, the most forthe period in any year since the introduction of the singlecurrency in 1999, according to data compiled by Bloomberg. Totalissuance reached a record 230 billion euros last year, the datashow.

Sterling-denominated sales were given a summer boost when theBank of England followed in the footsteps of the ECB and said itplanned to buy corporate bonds as part of its measures to stimulatethe U.K. economy. Issuance reached 3.4 billion pounds ($4.5billion) last month, the most for any August in data going back to1999 and the biggest monthly tally since January 2014.

The ECB and BOE both loosened monetary policy this year isresponse to concerns that slowing growth in China, weak consumerprices and the U.K.'s decision in June to leave the European Unionmay precipitate a region-wide recession. The European Central Bankheld a total 20.5 billion euros of the debt as of Sept. 2.

That helped push the average yield on investment-grade eurodebt to a record low of 0.62% last week, and it was at0.64% Monday, according to Bloomberg Barclays index data. Forsterling debt, the average yield is 2.17% after reaching a low of2.06% last month.

“This is an attractive time to issue,” said Gordon Shannon, aLondon-based money manager at TwentyFour Asset Management, whichoversees 7 billion pounds of assets. “The all-in cost of borrowingis currently very low with spreads and yields at historical lows.The ECB and Bank of England's presence in the market buyingcorporate bonds creates an excellent technical backdrop.”

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