Companies have issued a record $41.2 billion of speculative-grade debt globally so far this month--surpassing every other month since at least 1996, according to data from researchers at Bank of America Merrill Lynch.

The previous monthly record for junk-bond sales was in March last year with $40.9 billion, followed by September 2010 with $39.2 billion, BofA said. There are still two trading days left this month, with $1.79 billion of high-yield offerings expected through Friday.

Fueling the wave of deals this March was a preceding slump in supply as companies focused on earnings season and subsequently decided to come back to market, as well as several high-yield offerings previously being shelved as investors became unnerved by geopolitical events.

Once concern over the nuclear crisis and natural disasters in Japan began to ease, and political turmoil in the Middle East stopped spreading, the window for issuance creaked open again.

"A lot of companies were waiting for some stability," said John Cokinos, co-head of leveraged finance capital markets in the Americas at BofA. "Two weeks ago, investors were preoccupied with world events and increased volatility. It wasn't until last Monday we saw investors refocus."

The broad sentiment now, Cokinos added, is that while there is still uncertainty among buyers, recent events won't derail the credit markets--even sales of low-rated corporate bonds.

Investors pulled $677 million out of mutual funds and exchange-traded funds focusing on high-yield corporate debt through the week ended last Wednesday, compared with $471 million of outflows the week before, said Lipper FMI, a unit of Thomson Reuters. That followed 14 straight weeks of inflows, when investors had been clamoring for high-yield bonds because of the premium they can earn over low-yielding government debt.

Market volatility sent premiums on high-yield bonds to 5.10 percentage points over Treasurys as of March 17, compared with 4.76 percentage points over Treasurys now, according to the Merrill Lynch High Yield Master II index. Now, companies are back with a pipeline of offerings, many of which will be used to refinance existing debt.

"With overall high-yield yields not far above record lows, issuers are taking advantage and coming to market," said Anthony Valeri, a fixed-income strategist at LPL Financial in Boston. Refinancing has been responsible for more than 60% of new issuance, Valeri added.

Auto parts supplier Visteon Corp. (VC) is planning a $500 million sale of eight-year senior bonds, with pricing expected later this week. Proceeds will be used to help the company retire a term loan due in 2017.

Also marketing new high-yield debt sales are CNL Lifestyle Properties Inc., a real-estate investment trust, and Ferrexpo Finance PLC, a unit of Swiss iron-ore pellet maker Ferrexpo Plc (FXPO.LN, FEEXF). Both are inaugural offerings for the issuers.

CNL Lifestyle is planning to sell $400 million of eight-year senior bonds to qualified investors, with early price guidance in the area of 7%, according to one investor. Ferrexpo Finance wants to sell $500 million of five-year bonds.

The largest of this month's $41.2 billion junk-debt sales was a $3.2 billion offering from Kabel Baden-Wurttemberg GmbH & Co. KG, followed by a $3 billion sale from Fiat Industrial Finance Europe SA and a $2.65 billion deal from Intelsat Jackson Holdings SA, said BofA.

The overall tally excludes emerging-market offerings and issuers that are split-rated, meaning the ratings agencies don't agree on whether it should be speculative grade or investment grade.

-By Katy Burne, Dow Jones Newswires; 212-416-3084; katy.burne@dowjones.com
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