Oct. 12 (Bloomberg) -- Corporate bond offerings surged to the highest level in four weeks as borrowers from General Electric Co.’s finance unit to Time Warner Inc. took advantage of growing confidence that Europe’s debt crisis will be contained.
Kohl’s Corp., the fourth-largest U.S. department store- chain and Montreal-based National Bank of Canada are also among companies that sold $9.1 billion of debt in the U.S. today, according to data compiled by Bloomberg. Laredo Petroleum Inc. issued $200 million of high-yield, high-risk bonds in the first offering of the debt since Sept. 27.
Issuance is showing signs of life after failing to exceed the 2011 weekly average of $24.4 billion for three straight periods, Bloomberg data show. Political leaders in Slovakia, the only country in the 17-member euro area yet to sign off on the European Financial Stability Facility, agreed today to approve the region’s enhanced bailout fund.
“If we keep seeing positive developments out of Europe, the new-issue calendar will continue to open up, maybe even to the extent that we start to see some activity from high-yield issuers again,” Adrian Miller, a New York-based fixed income strategist at Miller Tabak Roberts Securities LLC, said in a telephone interview.
GE Capital sold $1.25 billion of five-year notes that yield 222 basis points, or 2.22 percentage points, more than similar- maturity Treasuries and $1.75 billion of 10-year debt that pays a 247 basis-point spread, Bloomberg data show.
Time Warner issued $500 million of 4 percent, 10.25-year securities that yield 200 basis points more than the benchmark and the same amount of 5.375 percent, 30-year bonds that pay a spread of 225 basis points, Bloomberg data show.
National Bank of Canada sold $1.4 billion of five-year, 2.2 percent covered bonds and Toronto-Dominion Bank issued $1.5 billion of 2.35 percent notes coming due in October 2016, Bloomberg data show.
Kohl’s, based in Menomonee Falls, Wisconsin, issued $650 million of debt due in 2021 in its first offering since September 2007, Bloomberg data show. Petroleos Mexicanos priced an additional $1.25 billion of 6.5 percent bonds due in June 2041, doubling the amount outstanding.
Laredo Petroleum increased the size of its offering of 9.5 percent notes due in February 2019, which are rated Caa2 by Moody’s Investors Service and CCC+ by Standard & Poor’s, from $150 million, according to a person with knowledge of the transaction who declined to be identified because the marketing was private. The company sold $350 million of the debt in January, Bloomberg data show.
Companies had issued $1.55 billion of debt this week through yesterday after selling $8.63 billion during the period ended Oct. 7, Bloomberg data show. Issuance reached $12.2 billion on Sept. 14.
Speculative, or high-yield, high-risk, corporate bonds, are ranked below Baa3 by Moody’s and BBB- by S&P.
Editors: Pierre Paulden, John Parry
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