Cheapest Debt In a Year Prompts Flurry of Corporate Bond Sales

(Bloomberg) -- Falling funding costs helped spur companies to tap the debt capital markets Tuesday after five weeks of slumping sales that missed dealer estimates.

Danaher Corp. is leading the charge of a packed investment-grade calendar with today’s biggest sale, as eight other companies also sell debt. Issuers are looking to capitalize on some of the cheapest funding costs of the year, with spreads at their tightest level since October 2018.

Tuesday’s crowded schedule stands out in an issuance month running short of projections. Just $49 billion of high-grade bonds were sold as of the close of business on Monday, paling in comparison to initial estimates of $85 billion.

Sales started picking up on Monday when Citigroup Inc. and Hershey Co. joined other companies to sell over $9 billion. In a sign of the veracious investor appetite, order books for the sales swelled, with Hershey’s running seven times over the amount sold.

As more companies report third quarter earnings and the season comes to an end, companies are emerging from self-imposed debt issuance blackouts, raising the number of candidates able to sell debt.

--With assistance from Michael Gambale.

To contact the reporter on this story: Elizabeth Rembert in New York at erembert@bloomberg.net

To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Christopher DeReza, James Crombie

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