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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| 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
|
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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Investment-Grade Bond Sales Soar |
THE WALL STREET JOURNAL - Sept. 29, 2010 - By KATY BURNE
NEW YORK—Investors have snapped up more than $100 billion of investment-grade bonds so far this month, making September the busiest month for new issuance this year as highly rated companies take advantage of low interest rates to borrow cheaply.
High-grade corporate bond sales have surpassed the previous monthly high of $102.3 billion in March, though the year-to-date total trails last year's record pace. Bankers forecast as much as $20 billion this week alone after BP PLC offered $3.5 billion of debt Tuesday and others sold $11 billion on Monday.
Corporate treasurers at Microsoft Corp., Johnson & Johnson and other highly rated industrial companies—that is, not banks, which are frequent bond issuers—have been stockpiling cash to fund future opportunities and perhaps to reward shareholders with share buybacks or dividends.
"These issuers really care about the fixed-rate cost of debt and what they pay...to hold rainy day money when it is not in use," said Jonny Fine, head of investment grade syndicate at Goldman Sachs.
A steady decline in borrowing costs—the most recent being Microsoft's ability to sell $1 billion of three-year notes at an interest rate of less than 1% last week—is behind the boom, and the market has been able to absorb the supply seemingly without indigestion. So what gives?
Risk-averse investors seeking to avoid stock market volatility have been bidding up the price of U.S. Treasury securities all summer long, steadily driving down their yields, which move inversely to price.
That led others to turn to high-grade corporate bonds in search of higher returns. The demand has let companies cut their borrowing costs even as they borrow more. Andrew Karp, head of investment-grade debt syndicate at Bank of America Merrill Lynch, said the cost of money is "materially more attractive than the previous quarter."
September is traditionally a high-volume month because investors return from Labor Day eager to put money to work after summer. It was doubly busy this year because issuance all but dried up after Europe's sovereign debt crisis in the spring. There was also less merger-and-acquisition activity in the first half, which eliminated a chunk of the normal need for financing.
That changed after the release of the European stress test results in July, which calmed investors' nerves and encouraged issuers to come out with all that pent-up supply, said Mr. Karp.
"The first quarter is normally the busiest as people think about doing their funding then and the second quarter follows on from that," he said. "So this is unique in that the third quarter will be bigger than the second."
Additionally, some deals may have been brought forward because of November's mid-term elections, or because of the growing acknowledgment that there may not be a double-dip recession after all.
"Uncertainty regarding the election outcome and potential changes to tax policy have prompted issuers to accelerate funding plans," said Peter Aherne, head of capital markets and syndicate at Citigroup.
Demand still outstrips supply, for now. Lipper FMI said that inflows into U.S. corporate investment-grade debt mutual funds and exchange-traded funds totaled $872.2 million last week, up 0.24% on the week before.
For the complete article visit THE WALL STREET JOURNAL
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