B. of A., Berkshire, Mexico sell bonds in $50 billion flood of new issues

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Offline Letsbereal

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B. of A., Berkshire, Mexico sell bonds in $50 billion flood of new issues
9 January 2013
, by Deborah Levine (MarketWatch - Blogs)
http://blogs.marketwatch.com/thetell/2013/01/09/b-of-a-berkshire-mexico-sell-bonds-in-50-billion-flood-of-new-issues/

Indeed, right before and during quarterly earnings season is traditionally a slow time for corporate bond sales, because companies inflict an informal blackout period on themselves until results are out.

However, the really doesn’t hold for January, which tends to be one of the busiest issuance months of the year, according to Informa Global Markets.

Companies and other institutions have already sold $52.75 billion in U.S.-denominated debt this month – in five business days, according to the firm.

Many issuers are taking advantage of the stable markets before their earning blackouts begin,” said Edward Marrinan, a credit strategist at RBS.

We expect more of the same today and see no reason for the extremely strong market tone to change anytime soon.”

Bank of America sold $6 billion in debt on Tuesday, while Staples and Toyota Motor Credit each sold more than $1 billion.

Berkshire Hathaway Finance Corp., an arm of Warren Buffett’s Berkshire Hathaway Inc. issued $500 million.

On the other end of the credit spectrum, Comcast Corp. sold $2.95 billion in bonds.

And foreign governments were not to be left out, seeing very good demand for dollar-denominated debt.

Mexico issued $1.5 billion in 30-year bonds at a record low yield of 4.19%.

Read more on Mexico’s debt auction http://blogs.marketwatch.com/http://www.reuters.com/article/2013/01/07/mexico-economy-bond-idUSL1E9C7BWX20130107

Turkey sold $1.5 billion in 10-year debt at a record low 3.47%.

See more on Turkey’s bond sale http://www.businessweek.com/news/2013-01-09/turkish-yields-drop-most-in-a-year-on-excess-demand-at-debt-sale

For come context, compare those levels for developing-country debt to the average yield on the Barclays U.S. corporate index of 2.72%.

Yields have fallen as investors pile into corporate bonds (and to a lesser extend, high-yield and global bonds) in a search for higher yields.

See: Four charts that say the ‘cult of equities’ is dying http://www.marketwatch.com/story/4-charts-that-say-cult-of-equities-is-dying-2013-01-09

Analysts expect companies to sell about $111 billion this month, according to a poll by Informa.
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