NEW YORK — As investors slowly start buying commercial paper again, the frozen market for longer-term corporate debt is also showing signs of thaw.
Altria Group, which owns No. 1 U.S. cigarette maker Philip Morris USA, sold $6 billion in bonds earlier this week — an issuance that alone tops the weekly market totals since Lehman Brothers Holdings Inc.’s bankruptcy in September.
It’s a good sign for the long-term corporate-debt markets, in which demand has dropped off, interest rates have soared and borrowers have recoiled from paying often unmanageable prices for funding.
But investors aren’t cheering yet — corporate-debt issuance is still tough for most companies. The swap market, where corporate borrowers decide whether to switch their floating rates to fixed rates, on Thursday still showed “very high levels of anxiety,” said Howard Simons, strategist with Bianco Research in Chicago.
Fortunately, it appears that corporate- bond issuance will be higher this week than it was last week, said Miller Tabak & Co. analyst Tony Crescenzi in a note Thursday. “When U.S. companies return to the corporate bond market to raise money, the credit markets will be viewed as functioning more normally,” Crescenzi wrote.
