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Jump to full article: Bloomberg News, 2009-03-17
Author: Shelley Smith and Paul Armstrong
Intro: Bond sales by Philip Morris International Inc. and Deutsche Lufthansa AG today will push European issuance for the year above 100 billion euros ($130 billion), the quickest it has ever reached that level.
Borrowers are taking advantage of investor demand for corporate bonds, on which spreads relative to government debt have soared to a near-record in the credit crisis, according to Merrill Lynch & Co. data. Investors are providing a source of funding for high-grade companies by seeking better yields with lower risk, as they retreat from tumbling stock markets.
“The race is over for the 100 billion-euro mark,” said Suki Mann, senior credit strategist at Societe Generale SA in London. “The benchmark deals today leave us needing to build an Arc to contend with the flood of issuance.”
Philip Morris, the world’s largest publicly traded tobacco company, led the sales, with a planned 2 billion-euro issue, while Lufthansa is raising 850 million euros and Dusseldorf- based E.ON AG, Germany’s biggest utility, is selling 750 million euros of bonds, bankers involved in the transactions said. Today’s issuance is the most since Feb. 25 and exceeds last week’s 3.8 billion euros, according to data compiled by Bloomberg.
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