Debt Markets See Record Issuance

--$100.29 bil of US dollar denominated IG issuance in Jan. But excluding debt backed by FDIC, the issuance was 75.8 bil. Excluding Non US debt, it will shrink to 57.25 bil, below 74.27 bil in Jan 2008 and 77.2 bil in 2007 --4.76 bil HY in Jan 2009 By ANDREW EDWARDS and MARK BROWN The economy may be sliding, but the debt markets have certainly found some traction. Corporate bond issuers tapped the debt capital markets on an unprecedented scale in January, taking advantage of renewed investor appetite for corporate credit. The $100.29 billion of U.S. dollar-denominated investment-grade issuance was the highest on record, according to figures released Friday by Dealogic. That easily trounced the previous record of $81.86 billion in 2001. In the riskier high-yield market, issuance was $4.76 billion, well below the levels of recent years but certainly respectable. The market has opened up even wider in recent days as chief financial officers attempt to capitalize on so-far insatiable demand. However, a closer look at the figures makes for a more disturbing read. Excluding debt that was backed by the U.S. government, January U.S.-dollar-denominated issuance came in at $75.84 billion. Excluding debt from outside the U.S., that shrinks to $57.25 billion, well below the $74.7 billion issued last January and the $77.2 billion issued in January 2007. Cellco Partnership/Verizon Wireless Capital was offering $4 billion in the investment-grade corporate bond market Friday, according to a person familiar with the deal. The $3.5 billion five-year note was launched at a spread, or risk premium, of 3.90 percentage points above Treasurys. The $500 million, three-year note was launched at 4.05 points above Treasurys. These yield premiums are at the tighter end of the expected range, which indicates demand since investors are willing to accept less. European debt markets were equally buoyant. Nonfinancial, investment-grade, euro-denominated bond issuance totaled €48.4 billion ($62.75 billion) this month, according to figures from Société Générale AG. That is easily the highest figure since the creation of the common European currency. The previous highest monthly figure was €24.9 billion, in January 2003, it said.