Firms in Europe sell $43 billion of bonds

Bloomberg

Sales jumped from 22.7 billion euros in the same month a year ago, and rose above the previous record of 31.8 billion euros in December 2006, according to data compiled by Bloomberg. Verizon Communications, the second-largest U.S. wireless company, raised the equivalent of $2.4 billion by issuing bonds in euros and pounds this week, while Coca-Cola Hellenic Bottling got 500 million euros from a sale of five-year notes.

"The corporates that have come to the market have been very good-quality names which have been coming at very wide spread levels," said Puneet Sharma, head of investment-grade credit strategy at Barclays Capital in London.

Bond sales increased as European investor confidence fell to an all-time low in December, Germany’s Sentix research institute said. The extra yield investors demand to buy company bonds rather than government debt climbed to 4.19 percentage points, according to Merrill Lynch’s European Investment-Grade Corporate Bond Index.

Verizon Wireless
Verizon Wireless, a unit of New York-based Verizon Communications, sold 650 million euros of three-year bonds at a yield of 450 basis points more than the benchmark mid-swap rate, and 500 million euros of seven-year notes with a spread of about 510 basis points, Bloomberg data show. The company also sold 600 million pounds ($896 million) of 10-year bonds at 520 basis points more than similar-maturity U.K. government debt.

Daimler, the world’s second-largest maker of luxury cars, sold a total of 1.6 billion euros of bonds this month. It issued 1 billion euros of three-year bonds on Dec. 1 that were priced to yield 680.9 basis points more than government debt, and 600 million euros of securities due June 2010 that yielded 515 basis points more midswaps this week.

Societe Financement de l’Economie Francaise, a French agency that provides government-guaranteed loans to banks, was the biggest issuer of bonds in Europe this month, selling 6 million euros of two-year bonds on Dec. 1.

Banks in Europe sold bonds with and without government guarantees in December. BNP Paribas, France’s biggest lender, raised 1.5 billion euros this week by selling five-year securities without government backing.

Credit Suisse Group followed with an 850 million-euro issue due in May 2014, yielding 270 basis points more than midswaps, Bloomberg data show.