At least four new corporate bond issues slated for today alone suggest that that market, anyway, has gotten off to a strong start this year.
Brown-Forman Corp. is expected to sell $250 million of five-year notes, while Tyco International Finance, guaranteed by Tyco International Ltd., is planning to bring $500 million of 10-year notes to market, according to Reuters. In addition, TransCanada Pipelines Ltd. is planning to offer 30-year bonds, and Devon Energy is expected to sell five- and 10-year notes, according to the wire service.
In late November, TransCanada Corp. offered about $793 million common stock. Also, on Tuesday Barclays cut its rating on Devon’s stock, in large part because it has not hedged a substantial portion of its 2009 natural gas production.
Later this week, Centerpoint Energy is expected to bring $300 million in 5-year notes to market, while Anheuser-Busch is scheduled to issue five-year, 10-year, and 30-year paper.
These offerings come on the heels of yesterday’s $10 billion sale of FDIC-backed paper from General Electric Capital Corp. in a three-part deal as well as smaller issues from PacifiCorp, a unit of MidAmerican Energy Holdings, and Weatherford International, Reuters pointed out.
The wire service noted that in 2008, sales of corporate bonds plunged nearly 35 percent to $645 billion, the slowest year since 2002, as investors shunned risky offerings. The market started to turn last month for FDIC-backed paper and other issues with the highest credit ratings. But most issuers are paying a hefty spread to Treasuries to get their deal done.
If these spreads tighten amid the lowest interest rates in decades, there could be a surge in new issues, especially if the economy starts to show signs of improvement.