(Feb 27): Blue-chip companies in the US have sold a record US$172 billion (RM821.6 billion) of bonds in February after falling yields spurred investors to buy debt and pushed companies to take advantage of relatively cheaper borrowing costs.

The sales topped the prior record for February of US$150.9 billion, set last year, according to data compiled by Bloomberg News. Issuance for the entire year has surpassed US$361 billion, also a record.

The record comes on the heels of the busiest week in nearly two years, driven in part by a deluge of bonds sold to fund mergers and acquisitions. And dealers say more bond sales are on the way.

“The market is going to continue to be active,” Meghan Graper, global co-head of debt capital markets at Barclays Plc, said in a phone interview last week. “I don’t see any signs of this supply wave abating.”

Eighteen companies are tapping the market on Monday, including Honeywell International Inc, NatWest Group Plc and KeyCorp. Although this month is the busiest February on record, it nevertheless falls short of the most active month for sales set in April 2020, when companies issued US$285 billion of bonds.

February’s issuance has gotten a boost from buyout funding. In just the past two weeks, about US$50 billion of notes have been sold to help finance acquisitions and spinoffs, including offerings from AbbVie Inc, Bristol Myers Squibb Co and Cisco Systems Inc.

Seemingly insatiable investor demand is making this month particularly busy. For money managers, it’s an opportunity to snap up notes with elevated yields before the Federal Reserve can pull interest rates lower.

Not only are investors loading up on bonds at frenzied levels, borrowing costs have ticked lower from an October peak. The average spread for high-grade bonds traded at the lowest level since November 2021 last week despite the gush of supply.

Syndicates are forecasting about US$35 billion in fresh bond sales in the coming week.