JPMorgan Chase & Co. is tightening its grip on the global corporate bond market, taking share from Citigroup Inc. and Bank of America Corp. and topping all underwriters as companies sold a record $1.17 trillion of debt.

The most profitable U.S. bank's underwrote 7.1 percent of all bond sales in the three months ended March 31, up from 6.5 percent in 2011, data compiled by Bloomberg show. Citigroup moved up two spots to second with 5.7 percent, the same amount it captured last year. Bank of America dropped to third with 5.6 percent, down from 6.1 percent in 2011. Deutsche Bank AG, which dropped to fourth from third, handled 5.5, down from 5.9.

JPMorgan is leading banks reaping the benefits of a Federal Reserve outlook that benchmark interest rates will hold near zero until at least late 2014 and an easing in Europe's debt crisis that has bolstered confidence that default rates will stay below the historical averages. Increased demand for higher-yielding assets is allowing companies from Australia to Amsterdam to borrow at record-low rates.

“A real positive outcome on Europe kicked the market into high gear,” said Richard Zogheb, co-head of capital markets origination for the Americas at Citigroup in New York. He cited European Central Bank's unlimited three-year loans to the region's lenders and a restructuring of Greece's debt as reassuring bondholders. “Investor demand has been incredibly strong,” he said.

The average bond yield for companies from the neediest to the most creditworthy is 0.15 percentage point from the record low 3.99 percent reached in October 2010, according to Bank of America Merrill Lynch's Global Broad Market Corporate & High Yield Index. Yields fell to 4.14 percent on March 30 from 4.17 percent a week earlier.

Corporate debt sales at a record start to the year are making underwriting one bright spot for Wall Street earnings. Mergers and acquisitions in the quarter fell about 14 percent from the fourth quarter, making it the slowest three-month period in 2 1/2 years, Bloomberg data show.

The largest U.S. banks will probably post a 10 percent decline in first-quarter fixed-income trading revenue from a year earlier and an 8 percent decline in equities trading, Keith Horowitz, a Citigroup bank analyst, said in a March 29 note.

Bloomberg News

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JPMorgan Tightens Grip on Bonds

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