US corporate bonds sell like hot cakes

NEW YORK: US corporate bond sales soared to $41 billion this week, the most in almost eight months, as companies took advantage of investor demand to raise cash in a weakening economy.

Anheuser-Busch InBev NV, the world���s largest brewer, sold $5 billion of debt in its biggest offering. GE Capital became the first financial company since November to sell debt dollar-denominated that isn���t backed by the government. GE Capital���s $4 billion sale on January 6 followed its $10 billion offering the previous day through the US guarantee program.

The sales rush came as companies benefited from borrowing costs at a three-month low and investors funneled year-end coupon payments into investment-grade corporate bonds. Borrowers sought to refinance debt and build up cash reserves amid signs the recession is deepening.

���Companies will need access to a source of funds if they want to weather the headwinds,��� Adolfo Laurenti, a senior economist at Mesirow Financial Inc in Chicago, said in a telephone interview. ���The more they can tap the market, the better.���

GE Capital issued $4 billion of 6.875 per cent, 30-year bonds, on top of its $10 billion offering of Federal Deposit Insurance Corp-backed debt, the biggest since financial companies began using the government program intended to unlock credit markets on November 25.

The 30-year issue demonstrates that GE Capital���s FDIC-backed debt sales, totaling about $23 billion so far, have helped ease investor concerns that the company will be unable to fund itself amid the credit crisis, said Tom Farina, a director at Deutsche Bank AG���s insurance asset management unit in New York, which oversees $145 billion of fixed-income assets.

���I would characterize that as a pretty important event,��� Farina said in a telephone interview. ���The debt issue was something the market could get comfortable with,��� he said.