U.S. corporate bond sales soar, more to come in May

By Anastasija Johnson

NEW YORK, April 30 (Reuters) - May could be another strong month for U.S. high-grade corporate bond issuance, after tighter credit spreads and banks' efforts to patch up weakened balance sheets lifted April sales to pre-credit crisis highs.

U.S. companies sold $115.7 billion of high-grade debt month-to-date, according to Thomson Reuters data. That's the fourth-highest level on record and the highest level since last May, when issuers sold almost $117 billion.

Vincent Murray, head of investment-grade syndicate at ABN Amro, NY, said he expects another strong issuance month in May, though probably not as strong as April.

"The brokers and banks are going to continue to need to raise money," he said.

Issuance soared this month as the U.S. credit market rallied after the Federal Reserve orchestrated a rescue of Bear Stearns in March, calming fears that financial markets would be left to unravel under the weight of bad mortgage loans.

As a result, corporate credit spreads, which measure investors' perception of risk, have narrowed to 263 basis points over Treasuries from a record 305 basis points on March 20, according to a Merrill Lynch index.

"The result of the rally in investment grade has been a deluge of issuance," Lehman Brothers said in a report.

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