| 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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Company debt sales to rise this month, Informa says |
NEW YORK (MarketWatch) -- The amount of corporate bond sales in September should be much stronger than last month, and not just because summer vacations have ended, an analyst at Informa Global Markets said Tuesday.
It's also because the cost to issue debt is the lowest, by at least one metric, in more than a year. What's more, executives may not want to bet on financial markets getting ever better.
"We project that new corporate-debt issuance will be strong this month as companies continue to take advantage of low Treasury rates," said Mike Gambale at Informa Global Markets.
Treasurys are the benchmark for many kinds of debt including corporate bonds, so lower government-bond yields tends to lower a company's financing costs.
Yields on 10-year Treasury notes (UST10Y 3.51, +0.03, +0.75%) are 3.45%, down from 3.85% a month ago. See Bond Report.
Also, the spread over Treasurys that companies have to pay to lure investors is the lowest in more than a year, according to an index compiled by Merrill Lynch. That implies lower corporate-bond rates, making the selling debt more attractive to corporate financial officers.
The gap between Treasurys and an index of corporate debt maintained by Merrill is 2.53 percentage points, the lowest since last summer.
With those market conditions, finance chiefs may prefer to take the opportunity to complete any planned debt sales.
"With the immediate future a bit uncertain due to government-stimulus packages, Obama's agenda and chatter of exit strategies, meeting funding levels now will probably be a good idea as opposed to later this year," Gambale wrote in an email.
Analysts surveyed by Informa expect companies to sell $72.5 billion in debt this month. The analyst said issuance could top that.
Already, companies have sold $13.35 billion in investment-grade debt sold in September. In August, companies sold about $58.7 billion, according to Informa data.
Among deals expected to price as soon as Tuesday, Airgas Inc. (ARG 46.20, +0.28, +0.61%) , a distributor of industrial, medical and specialty gases, is in the market with $400 million in 5-year debt.
Also, AvalonBay Communities Inc. (AVB 67.26, +0.71, +1.07%) is selling $500 million in debt. Proceeds will reduce debt under a credit facility and be used to finance repurchases of long-term debt, the real-estate-investment trust said in a statement.
Drugstore operator CVS Caremark Corp. (CVS 36.68, -0.02, -0.05%) is planning to issue 30-year debt as soon as Tuesday, Informa said. The amount is not yet determined.
Deborah Levine is a MarketWatch reporter, based in New York.
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| Stuff to look at |
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S&P Commentary and Newsletters: S&P
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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