With default rates remaining low despite the eurozone crisis, fund managers view many of the continent’s biggest companies as relatively safe places to park their cash and more lucrative than government bonds whose rates have fallen to below zero. Measures by the European Central Bank to ease the region’s financial woes have also buoyed credit, sending borrowing costs to the lowest in five months.

“It’s a good time to be an issuer because yields are so low,” said Christopher Bullock, an analyst at Henderson Global Investors Ltd. in London, which oversees 18 billion euros ($22 billion) of fixed-income assets.

Companies have defied the usual summer slowdown to sell 1.47 billion euros of bonds in euros and pounds this month, an 82 percent increase from the same period a year ago, according to data compiled by Bloomberg. Issuance is on pace to surpass the 1.57 billion euros in August 2010 with the market headed for the busiest August since the record 4.6 billion euros in 2009.

Falling Costs

The extra yield investors demand to buy investment-grade company bonds fell 38 basis points since June 1 to 140 basis points more than benchmark German government debt, according to Bank of America Merrill Lynch’s EMU Corporates, Non-Financial index. The spread has narrowed 61 basis points this year. Credit hastened its rally since Aug. 2, when ECB President Mario Draghi signalled that the Frankfurt-based bank may buy sovereign debt.

Telenet, the cable operator controlled by Liberty Global Inc., raised 700 million euros last week from a two-part sale of senior secured notes, the company’s first deal since June 2011, Bloomberg data show. It issued bonds with a 6.25 percent coupon due in 2022 and 6.75 percent securities maturing 2024.

Chief Financial Officer Renaat Berckmoes said Telenet borrowed at less than 6.5 percent over the next 10 years aided by strong demand for corporate debt on prospects of ECB intervention to stop speculation against the euro.

“Spreads are very reasonable” and “long tenors are available,” he said in an e-mail. “Markets are extremely strong for corporate borrowing in anticipation of a more supportive ECB,” he said.

Volkswagen Bonds

Volkswagen raised 900 million euros through sales of floating-rate notes this month, as well as deals in other currencies including 250 million pounds ($392 million) of fixed- rate securities. Marco Dalan, a spokesman for the company in Wolfsburg, Germany, declined to comment.

Banks are also taking advantage of investor appetite for their debt to raise money.

Sales of financial-company bonds enjoyed their busiest day in more than a month on Aug. 16 as BNP Paribas SA, France’s largest bank, sold 1 billion euros of 2.5 percent seven-year notes and Svenska Handelsbanken AB raised 1 billion euros over 10 years.

Today, lenders including ING Groep NV are issuing covered bonds, a type of secured note considered by investors to be safer than traditional fundraisings.

The average spread of the 847 securities contained in Bank of America Merrill Lynch’s EMU Financial Corporate Index declined 84 basis points since June 1 to 247, the narrowest gap since Aug. 4, 2011. The index contains bonds sold by BNP Paribas and Goldman Sachs Group Inc.

“Underlying bunds and Treasuries have been trading, until the last few days, at very low yields,” said Michael Ridley, a credit analyst at Mizuho International Plc in London. “So funding costs for corporate bonds have been low.”