Aug. 6 (Bloomberg) — The value of new junk bonds is rising bythe most in at least three years relative to outstanding debt aslow trading volume and faster cash inflows into mutual funds forceinvestors to jockey for initial offerings.

New speculative-grade issues have outperformed Barclays Plc'shigh-yield index by about 1.8 percent this year, more than in 2011and 2010. Notes from Smithfield, Virginia-based Smithfield FoodsInc., the largest U.S. pork processor, rose 5.8 cents to 105.3cents on the dollar since being sold July 18, according to Trace,the bond-price reporting system of the Financial IndustryRegulatory Authority.

Junk-bond fund managers that have received $43.1 billion ofdeposits this year are struggling to obtain securities as tradingvolumes decline, reducing the accessibility of older bonds. Thesqueeze is exacerbated by a 54 percent drop in monthly debt salessince May, data compiled by Bloomberg show.