Pace of Corporate Bond Sales Hits 8-Month High

Companies from fashion designer Polo Ralph Lauren Corp. to Walt Disney Co. are selling bonds at the fastest pace in eight months as U.S. borrowing costs fall to the lowest since March.

Debt sales in the U.S. total about $61 billion so far in September, compared with $59 billion in all of August, according to data compiled by Bloomberg News. Sales of bonds with investment-grade ratings may reach $80 billion this month, according to Banc of America Securities analysts.

Burbank-based Disney sold $1.5 billion of bonds due in three years and 10 years on Sept. 6. Polo Ralph Lauren in New York plans to sell 300 million euros of bonds in Europe, some of which will pay debt, according to Standard & Poors Corp.

Corporate yields have dropped to an average 6.41% from this year’s high of 6.90% on June 28 as government securities rallied and the lending premium investors demand compared with Treasuries narrowed, according to Merrill Lynch & Co. index data.

“There was a lot of pent-up demand over the summer, and companies saw the market was open,” said Joe Biernat, head of research at European Credit Management, who helps oversee 18 billion euros ($22.8 billion) of securities.

“The fundamentals of the market are as strong as ever,” Biernat said.

Companies need the money, partly to pay for this year’s record $3 trillion of takeovers, according to Bloomberg News data. And investors are seeking higher returns as government bond yields decline. About $98 billion of corporate bonds were sold in January, the most since at least 2000, when Bloomberg began compiling the data.