US 30-year corporate debt sales hit $100bn Annual sales of 30-year US corporate debt have broken the $100bn mark for the first time since the start of the financial crisis, and is on course to surpass the previous record year set in 2007. The latest quantitative easing moves last week by the US Federal Reserve provided another incentive to companies, which are keen to lock in long-term funding at rock-bottom interest rates at a time when investors, particularly pension and institutional funds, are hungry for higher yields than the ones offered by top-tier government securities. "We are seeing nothing short of a stampede towards fixed income markets," said Jason Brady, portfolio manager at Thornburg Investment Management. "Companies are happy to take money at the lowest costs they've ever been, while investors" insatiable demand for yield is also seen in their willingness to take the longer [dated] bonds," he added. US utility Duke Energy and Swiss drugmaker Novartis were the latest to join a string of global corporations, including the UK's SABMiller, United Technologies of the US and Brazil's Vale, which sold a combined $103.2bn in 30-year debt this year up to Tuesday, according to Dealogic. The sales have already surpassed the entire amount sold in 2011 and may at this pace challenge the 2007 record of $125bn. The sweet spot opened for long-term borrowers at the start of the year when the Fed pledged to keep rates low until at least 2014, and the yield on the US Treasury long bond touched a record low of 2.44 per cent in July. The central bank extended the issuance boom last week after it announced a bond-buying programme aimed at keeping borrowing costs low for longer. Since then, companies have sold $1.62bn worth of 30-year paper. Long-term debt is particularly attractive to pension funds, as well as insurance companies. That group of investors tends to favour 30-year bonds because it matches the long-term nature of their obligations to retirees. US pension funds have bought only small amounts of Treasuries this year, while they have increased their holdings of corporate debt, according to Fed data. "Investors who have to carry long-term debt in their portfolios are lining up for those bonds because historically, sales of 30-year debt have lagged that of other maturities," said Adrian Miller, a global markets strategist at GMP Securities. "In turn, companies with good balance sheets have absolutely no difficulty in selling 30-year debt, and, in fact, they keep doing so at lower and lower rates," he said. The performance of the bonds has been strong. At 8.8 per cent, the year-to-date return on long-term investment grade debt far exceeds the 1.3 per cent for US Treasuries maturing in 20 years or more, according to Barclays.