Corporates line up to get out dollar bonds Companies on Monday were lining up to sell dollar-denominated debt in what was heading for being one of the busiest days for issuance so far this year after a fall in yields in the corporate bond market to record lows. Corporate bonds have rallied in recent months as investors search for investments that offer a higher yield than US Treasuries. That demand, along with low benchmark rates on Treasuries, has driven yields on investment-grade bonds to consecutively new lows this year. Greg Hall, managing director in debt capital markets at Barclays Capital expected $20bn of issuance on Monday. Proceeds from recent deals have been used for refinancing, capital expenditures, stock buybacks and contributions to pension funds said Mr Hall. Seven investment-grade deals of benchmark size, which is usually at least $1bn, were expected to price on Monday. Also there was at least $4bn of high yield or junk rated deals announced on Monday. Michael Kastner, principal at Halyard Asset Management says the strong start for debt issuance this month will continue as companies look to take advantage of low yields. This is just the start and we expect an onslaught of issuance as spring unfolds. Rates are low and corporate treasurers are making sure they get in before rates rise," he said. Average yields on investment grade bonds on Friday fell to a new record of 3.27 per cent, according to an index from Barclays Capital that dates back to 1973. US blue-chip companies, including Walt Disney, IBM, Procter & Gamble and McDonald's, have already been able to sell bonds this year at record low costs. Average yields on junk bonds have fallen sharply this year to around 7 per cent, but these are not their all-time lows. The US Federal Reserve began the year by pledging to keep interest rates near zero through the end of 2014. It is also capping long-term yields via the purchase of bonds under Operation Twist. Since last November the yield on the benchmark US 10-year note, which serves as a key reference for corporate bonds has been anchored around 2 per cent. "Global central banks are keeping rates at extraordinarily low levels and investors are trying to find ways to get returns on their capital," said Jason Brady, a portfolio manager at Thornburg Investment Management. Any time rates are low and investors are excited to buy, issuers will find reasons to sell bonds. Also boosting debt sales is the fact that record low borrowing costs for companies raises the appeal of selling debt and using the proceeds to buy back stock. For February, US equity buybacks ran at their highest in five months, topping $42.2bn according to TrimTabs. Mary Austin, portfolio manager for Pax World's High Yield Bond Fund questioned whether the deals are attractive for investors at current low yields. It's been hard to be very excited for some of the names that are coming in because yields are very tight, at 5.5 per cent. It's good for the companies, they manage to increase their cash flow at very low rates. But again, I don't think I would purchase [high-yield debt] at 5 or 5.5 per cent levels," she said. Additional reporting by Michael Mackenzie