Sales of corporate bonds in the U.S. fell to $4.45 billion this week, the slowest period in more than a month, as relative yields widened.
Abbey National Treasury Services Plc, a U.K. unit of Banco Santander SA (SAN), issued $1 billion in its largest dollar offering in more than two years, and Pittsburgh-based PNC Financial Services Group Inc. (PNC:US) raised $750 million, according to data compiled by Bloomberg. Offerings fell from $19.3 billion last week and were the least since $1.3 billion in the five days ended July 5.
The extra yield investors demand to own corporate bonds rather than government debentures rose to 223 basis points yesterday from 221 basis points on Aug. 16, according to the Bank of America Merrill Lynch U.S. Corporate & High Yield Index. Yields increased to 4.28 percent from 4.19 percent, and compare with a record low 3.35 percent on May 2.
Abbey National issued 3.05 percent securities due August 2018 with a spread of 155 basis points, Bloomberg data show. The sale was its biggest dollar offering since April 2011.
The debt traded at 99.6 cents on the dollar to yield 3.15 percent at 8:49 a.m. in New York today, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
PNC, the second-largest U.S. regional bank, sold 1.3 percent notes due October 2016 to pay a relative yield of 62 basis points, Bloomberg data show. The bonds traded yesterday at par, Trace data show.
Sales of investment-grade debentures, which account for the entire portion of bonds sold this week, compare with $14.6 billion last week and a 2013 weekly average of $22.2 billion, Bloomberg data show.
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