Noble to sell bonds as spreads tighten to narrowest in 2009
Thursday, 22 Oct 2009
Bloomberg reported that Noble Group Limited plans to sell bonds as corporate bond yields tighten to the narrowest this year relative to benchmark rates. Noble is marketing a benchmark, dollar denominated offering of 10 year bonds, according to a person familiar with the transaction who declined to be identified because terms aren’t set.
According to Merrill Lynch & Co's US Corporate Master index, yields on investment quality bonds narrowed 1 basis point relative to similar maturity Treasuries to 229 basis points on October 16th 2009. Corporate bond issuance, on pace to raise a record amount of cash this year, may decline as companies satisfy their refinancing needs and finishing extending debt maturities, even as borrowing costs fall.
Mr Vincent Murray head of US fixed income syndicate at Mizuho Securities USA in New York. Borrowers have sold at least USD 1.03 trillion in bonds this year, a 48% increase from the corresponding period of 2008.
He added that "I think to some extent we’ve run out of issuers. There's more down the road, but I sense the fourth quarter is going to be steady but not robust."
