Bond sales globally have exceeded a record $1.16 trillion in the first three months of 2012 as moves by global central banks along with reduced risk from Europe’s sovereign debt crisis drive credit-market optimism.
Offerings by companies from Europe to Asia and the U.S. have surpassed the previous record of $1.155 trillion reached in the first quarter of 2009, according to data compiled by Bloomberg. Yields on global corporate bonds fell to 4.12 percent on March 29, within 15 basis points of the lowest yield in records going back to 1997, Bank of America Merrill Lynch Index data show.
Issuance has climbed as the Federal Reserve holds borrowing rates near zero and after the European Central Bank’s Long-Term Refinancing Operations have supplied more than a trillion euros ($1.3 trillion) of three-year loans to banks since December. The efforts by the central banks along with the successful restructuring of Greek bonds have helped improve confidence in credit markets.
“The success of the Greek PSI and the LTRO programs have been catalysts for the improved credit market conditions globally,” Brendan Hanley, a managing director of investment- grade capital markets at Bank of America Corp., said in an interview at the lender’s New York office this week. “Increased fund flows have contributed to the outsized demand for the new issue calendar.”
Returns on global bonds of 3.92 percent through March are poised for the best gains since the third quarter of 2010 when the securities returned 4.33 percent. Yields on the debt reached a low of 3.99 percent in October of that year, Bank of America Merrill Lynch Index data show.
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