Sales of US high-grade debt set to pick up Sales of US high-grade corporate bonds are expected to pick up in the coming days as borrowers try to squeeze in deals ahead of the start of the US earnings season next week. After a slow start to the second quarter on Easter Monday, with many markets in Europe and Asia closed, global corporate borrowers with strong balance sheets, such as Home Depot, returned to debt markets. Boston Properties and Kerry Group were also expected to sell bonds by the close of trade on Tuesday. The combined offers may help push total sales of new debt rated as investment grade up to $20bn by Friday, and to as much as $80bn by the end of the month, according to estimates by RBS. Corporate borrowers will take advantage of a decline in market volatility this week after a scramble over a bailout programme for Cyprus hit global markets at the end of March, analysts said. This week may also offer an opportunity for a handful of US companies to raise funds before they enter the so-called quiet period which precedes earnings reports and limits their activity in capital markets. There is a need for new supply of investment grade debt. Borrowers are always on the lookout for the best time to come back to markets as volatility has eased and we have earnings starting next week," said Adrian Miller, a director for fixed income strategy at GMP Securities. "Even though valuations for investment grade bonds have been stretched on secondary markets, the new sales will go smoothly," he added. Demand for investment grade bonds has remained strong at the start of 2013 even as total returns on the securities have dwindled and US equities rose to record highs. Year-to-date, investors have poured almost $23bn into mutual funds and exchange traded funds that buy investment grade debt. By comparison, funds buying junk bonds saw only $516m in purchases in the same period, while equity funds experienced a $64bn inflow, according to RBS data. Total returns on investment grade bonds are flat so far this year, while junk bonds are showing a 2.9 per cent gain, according to Barclays indices. The S&P 500 stock market index, which breached its all-time high last week, is up 10.3 per cent. But the bonds are still compelling, in particular among institutional investors, insurers and pension funds which depend on long-term and liquid securities in order to match future liabilities. In addition, analysts said, the Federal Reserve's pledge to keep benchmark rates low until the unemployment rate drops below 6.5 per cent provides another incentive to hold low-yielding investment grade bonds. "As long as the Fed remains engaged in bond buying, the risk of a dramatic [rise] in yields is small," said Mr Miller. Investors know that.