Boeing, Citigroup Lead Biggest Jump in Bond Sales in 12 Weeks
Bloomberg reports: U.S. corporate bond sales jumped the most in 12 weeks as companies led by Boeing Co., the world’s second-biggest commercial-jet maker, and Citigroup Inc. took advantage of resurgent demand for their debt.
Issuance totaled at least $22.7 billion this week, up from $10.8 billion in the prior five-day period, according to data compiled by Bloomberg. Chicago-based Boeing offered $1.95 billion of debt and Citigroup, the New York-based bank, sold $2.5 billion of bonds in its biggest dollar-denominated issue without government backing since August.
Investors are snapping up bonds on speculation that efforts by companies to reduce expenses amid the deepest recession since the 1930s will bolster their creditworthiness. While second- quarter revenue fell 6.6 percent for the 180 companies in the Standard & Poor’s 500 that have reported results since July 8, per-share earnings beat analysts’ projections by an average of 11 percent, Bloomberg data show.
Bonds may continue to outperform stocks if the economy doesn’t recover as quickly as forecast. Federal Reserve Chairman Ben S. Bernanke in testimony before Congress this week noted risks in commercial real estate loans and said it “may be appropriate” for the government and Congress to consider “fiscal” measures to support the market.
Real Estate Outlook
Commercial properties in the U.S. valued at more than $108 billion are in default, foreclosure or bankruptcy, almost double the level at the start of the year, Real Capital Analytics Inc. said earlier this month.
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Posted by: Nina Turner