| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Corporate-Bond Sales' Blowout
Flurry Continues Into New Year Although Slowdown Is Seen |
THE WALL STREET JOURNAL - Jan. 6, 2009 - By ROMY VARGHESE And CAROL DEAN
The corporate-bond market has started 2010 with a bang, with companies selling $23.5 billion of bonds on Tuesday, the second-largest daily tally on record.
The flurry of sales, from giant General Electric Co. to Lloyds TSB Bank, follows a blowout year in which sales of investment-grade corporate bonds reached $1.4 trillion, outstripping corporate bank loans for the first time.
Tuesday's sales were just shy of the $27.7 billion sold on Feb. 18, 2009, according to data provider Dealogic.
"Everyone wants to borrow money right now," said Greg Habeeb, head of taxable fixed income at Calvert Asset Management in Bethesda, Md. "They're fighting over each other to get it done."
Bond issuers are jumping in to take advantage of investor demand while it lasts. After a record run in 2009, some investment managers say they are becoming increasingly leery of the rally. Yields on Treasury debt, which form the benchmark for corporate-borrowing costs, are widely expected to head higher as the economic recovery picks up.
Others are concerned about the risk that there may be a faltering in the expansion, hurting corporate profits. The skeptics wonder if the new bonds offer enough compensation to cover investors' risk should the economic recovery be more sluggish than expected.
Paul McCulley, who runs the short-term bond desk at Pacific Investment Management Co., the world's largest bond fund, said this week that his firm was "becoming a bit more cautious than we have been" with corporate bonds.
January is typically a busy month for bond sales, as companies address funding needs after the holidays and before their fourth-quarter earnings reports, according to Bank of America Merrill Lynch analysts.
Despite the blockbuster first two days of the year, this January is likely to fall short of the same time last year. Bank of America analysts estimate that this month's tally will be between $75 billion and $85 billion, compared with $123 billion in dollar-denominated debt in January 2009, according to Dealogic.
That is roughly in line with forecasts for a slower year in corporate-bond markets this year. Barclays analysts recently estimated that new high-grade bond sales would drop about 40% from 2009's record of $1.06 trillion.
Companies last year increasingly turned to the bond market for financing as banks reined in corporate lending. While investment-grade sales by nonfinancial companies reached $1.4 trillion, global syndicated lending to similar companies was $1.2 trillion, down 39% from 2008, according to Dealogic.
The average maturity of loan facilities was four years in 2009, down from five years in 2008, the lowest average on record. Refinancings reached $568.1 billion in 2009, accounting for 31% of all loan volume, up from 18% in 2008, in a sign that banks were less willing to make new loans.
Banks and financial companies dominated bond sales this week. Lloyds TSB Bank offered the largest deal, $5 billion in five- and 10-year notes. Closely following were General Electric Capital Corp., the finance arm of GE, and the German development agency KfW, each with $4 billion deals. Others included Barclays Bank and Deutsche Bank. Dexia Credit Local offered $4.5 billion in government-backed notes.
Financial firms are particularly eager to take advantage of low Treasury yields before they move higher, said Charles Sanford, managing director at Babson Capital Management.
Mr. Sanford added that banks also want to establish the ability to issue corporate debt without government guarantees. Many banks relied on guaranteed notes in 2009, when investors were particularly worried about the health of some financial institutions.
Skeptics aside, investors seem eager to accommodate borrowers. One measure of that is a benchmark high-grade credit derivatives index, a barometer of investors' sentiment toward credit, which has improved to its best showing in two years.
The Markit CDX North American Investment Grade index, which tracks the cost of default insurance on a basket of North American investment-grade companies, fell to 0.81 percentage point on Tuesday afternoon. The index last closed at that level on Jan. 2, 2008, according to Markit, a data provider.
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