Brunswick has huge day selling bonds

Petroleum Co. of Trinidad & Tobago Ltd. and Brunswick Corp., the maker of Boston Whaler fishing boats, are marketing debt after borrowers sold $12.2 billion of bonds yesterday, the busiest day of corporate-bond sales in more than two months, according to data compiled by Bloomberg.

Companies sold $12.2 billion of bonds yesterday, the most since June 3, when borrowers issued $15.5 billion of bonds, Bloomberg data show.

Petroleum Co. of Trinidad & Tobago, known as Petrotrin, plans to sell 10-year, benchmark dollar bonds that may price to yield about 10 percent, according to a person familiar with the transaction who declined to be identified because he's not allowed to speak publicly.

Brunswick, based in Lake Forest, plans to sell $250 million of senior secured notes as soon as today, according to a person familiar with the offering.

The Federal Reserve's maintenance of rock-bottom interest rates continues to drive investors demand for corporate bonds, Jeffrey Rosenberg, chief credit strategist at Bank of America Corp., said yesterday in an interview with Bloomberg Television.

"Fear has given way towards greed and a bunch of people are looking to take more risk and get more yield in their portfolio," Rosenberg said.

High-yield bonds performance, returning 5.7 percent more than U.S. government debt in July, helped to "highlight the abundance of cash committed to the asset class," analysts led by Citigroup Inc.'s John Fenn wrote in an Aug. 7 report. "The bid and tone to the secondary market was firm and allowed issuers to test the waters with confidence."

Bondholder Compensation

Yields on high-yield, high-grade, or junk, bonds relative to benchmark rates widened 1 basis point yesterday to 858 basis points, the first increase in 17 days, according to Merrill Lynch & Co's U.S. High- Yield Master II index. High-yield notes are rated below BBB- by S&P and less than Baa3 by Moody's.

The continuing rally is allowing weaker companies to come to market to refinance debt and avoid possible default, said Louise Purtle, chief strategist at CreditSights in New York.

"That's all good stuff in terms of the near-term risks around those particular names," Purtle said in an Aug. 7 phone interview. "But the question does remain -- what compensation are the bondholders who are participating in those deals getting?"

Investment-grade spreads tightened 2 basis points yesterday to 252 basis points, according to Merrill Lynch's U.S. Corporate Master index. A basis point is 0.01 percentage point.

Companies sold $12.2 billion of debt yesterday, compared with $1.75 billion the week before, according to data compiled by Bloomberg. Sales this year total about $851 billion, compared with $640 billion during the same period of 2008, the data show.

Borrowers seek to issue at least $5.2 billion of dollar- denominated debt, Bloomberg data show. Following is a description of pending sales of corporate and other bonds in the U.S.