Bond Sales Tumble as Ireland Crisis Spills Over: Credit Markets

Tuesday, November 30, 2010
By Paul Martin

By Tim Catts

Nov. 30 (Bloomberg) — Corporate bond sales worldwide are tumbling on concern Ireland’s debt crisis will spread across Europe as returns on the notes approach their worst month since credit markets froze two years ago.
Issuance has slumped 31 percent since Nov. 15, compared with the same period a year earlier, after surging 34 percent in the first half of the month, according to data compiled by Bloomberg. Plunging returns on debt of borrowers from France’s Credit Agricole SA to Bentonville, Arkansas-based Wal-Mart Stores Inc. are dragging bonds to a 1.08 percent loss in November, Bank of America Merrill Lynch index data show.

A five-month rally in company debt is foundering as an 85 billion euro ($111.5 billion) rescue package for Ireland, the second this year in Europe after Greece’s bailout in May, fails to ease concern the region’s most indebted nations will need more international help. The Organization for Economic Cooperation and Development cut its global growth forecast for next year, predicting a “soft spot” as stimulus dwindles.

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