Lockheed Martin Corp., the world’s largest defense contractor, sold $2 billion of bonds, as investment-grade corporate debt issuance is showing signs of revival.
Lockheed issued $500 million of 2.125 percent bonds due in 2016 that yield 127 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. A $900 million portion of 3.35 percent, 10-year debt pays a spread of 142 basis points and $600 million of 4.85 percent, 30-year securities pay 167 basis points more than the benchmark. A basis point is 0.01 percentage point.
Borrowing costs are hovering at about the lowest on record as Treasury yields decline amid concern that Europe’s sovereign debt crisis may spread at the same time that the U.S. economy slows. Bond sales for investment-grade companies in the U.S. may reach $80 billion this month, according to Bank of America Corp. strategists, after plunging to $50.5 billion in August.
Bethesda, Maryland-based Lockheed may use the proceeds to repay debt and for general corporate purposes, according to a filing today with the Securities and Exchange Commission.
Enbridge Energy Partners LP also issued $750 million of debt maturing in 10 and 29 years, Public Service Co. of New Hampshire priced $160 million of notes maturing in 2021 and Detroit Edison Co. sold $140 million of 30-year bonds, Bloomberg data show.
Issuance fell 30 percent to $3.98 billion last week, according to data compiled by Bloomberg. August’s sales were the least since May 2010.
Yields on investment-grade corporate bonds fell 14 basis points to 3.62 percent on average last week after touching 3.45 percent, the lowest in data extending to October 1986, on Aug. 4, according to the Bank of America Merrill Lynch U.S. Corporate Master index.
© Copyright 2022 Bloomberg News. All rights reserved.