Roche Holding AG sold $16 billion of bonds to finance its takeover of Genentech Inc. in a sign of thawing credit markets, according to data compiled by Bloomberg.
The second-largest company bond offering, along with a $10 billion sale of government-guaranteed debt by JPMorgan Chase & Co., propelled U.S. corporate debt issuance to a daily record yesterday of $32.55 billion.
Companies are selling debt at an unprecedented pace this year as they take advantage of a rally in credit to raise cash amid a deepening recession. This year's record bond issuance shows that government steps to stabilize the financial system are boosting highly rated debt markets, said Ashish Shah, head of credit strategy at Barclays Capital in New York.
"You'll see continued strength in investment-grade bonds," Shah said yesterday in a telephone interview. "The demand is there. Liquidity continues to improve across the credit markets."
Borrowers have sold $226 billion of bonds in 2009, 45 percent ahead of the 2007 clip, even as the Standard & Poor's 500 Index decreased 12.7 percent this year amid the worst financial crisis since the Great Depression. That's the stock index's worst start to a year, according to data compiled by Bloomberg going back to 1928.