Corporate America is on a borrowing binge. Company bond sales hit $677 billion this week, setting a new one-year record, according to the calculations made by Bloomberg.

Cheniere Energy’s $2.15 billion sale of notes earlier this week pushed the year’s total past the previous record of $675.7 billion, set in 2001, says the wire service. Furthermore, there are still some large offerings slated for the final two months of the year. In fact, more than a dozen companies, including HCA Inc. and Freescale Semiconductor, plan to trot out at least $80 billion worth of paper before the year runs out, notes Bloomberg, citing Banc of America Securities LLC. As a result, the brokerage is predicting that sales may total $800 billion by year-end.

Why the strong appetite for debt? Bloomberg cites the four-month rally in Treasury bonds and $1.29 trillion in mergers and acquisitions transactions. Indeed, Moody’s Investors Service estimates that debt sales from M&A accounts for 42 percent of the total, says Bloomberg.

Meanwhile, investors are mindful that default rates are the lowest in more than a decade, while earnings growth has exceeded 10 percent. In addition, Merrill Lynch’s index data says that corporate bonds have returned 5.22 percent this year, up from 2.21 percent in 2005, notes Bloomberg. Little surprise, then, that high-yield bond funds reported $201.3 million of net inflows in the week that ended Wednesday, indicating that investors are warming up to risky corporate paper, explains Dow Jones.

High-yield funds are certainly welcoming the largesse, given that HCA is scheduled to sell $5.7 billion worth of junk bonds next week, according to Bloomberg. The wire service also reports that lately companies have been paying an average of 1.52 percentage points more than similar-maturity Treasuries for corporate bonds, down from 1.65 in December. The average yield premium since 2001 is 2.33 percentage points.

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