Corporations offer record amount in issues, moving to take advantage of low interest rates
NEW YORK --- Corporations rushed a record amount of new notes and bonds to the market yesterday to take advantage of the lowest long-term interest rates in two decades.</br></br>Companies ranging from steelmaker Weirton Steel Corp. and telecommunications company Pacific Bell, a unit of Pacific Telesis Group, to wood products, gypsum and chemicals concern Georgia-Pacific Corp. issued $5.81 billion of new debt, a one-day record, according to Securities Data Co. The previous record was set Jan. 8, 1992, when $5.25 billion of debt was offered. So far this week, companies have borrowed $12.97 billion, just under the one-week record of $13.3 billion raised in the week ended Jan. 11, 1992.</br></br>The yield on the benchmark 30-year Treasury bond remained unchanged yesterday at 6.88% as its price dropped very slightly to 102 29/32. Before last week, the bond yield had never dipped below 7.10% since the Treasury began regular 30-year bond auctions in 1977. The price of 10-year notes dropped 1/8 point to 101 17/32 to yield 6.03%, up from 6.01% on Wednesday. The yield on the 10-year note has hovered at 20-year lows for the past four trading sessions.</br></br>While interest in the corporate notes and bonds seemed strong, said underwriters, demand was not nearly as strong as in January, when corporations issued more than $37 billion of new notes and bonds.</br></br>Some underwriters worried that yesterday's flood of new issuance could quell the strong investor demand for new corporate bonds in evidence so far this year.