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Issue high yield bonds? Need commercial paper?

Leveraged Loan Issuance Doubles on Narrower Spread to Junk: Credit Markets
By Emre Peker and Tim Catts – Oct 12, 2010

Leveraged loan sales are approaching a three-year high, enabling companies to slash borrowing costs, as yields relative to junk bonds reach the narrowest in 10 months.

Speculative-grade firms raised $260.1 billion in loans this year, more than double the amount in the same period of 2009, according to data compiled by Bloomberg. Reynolds Group Holdings Inc. and Tomkins Plc boosted loans in the past month at the expense of secured high-yield bonds.

The average yield on junk bonds is 80 basis points, or 0.8 percentage point more than leveraged loans, about the narrowest gap since December and down from 165 in April. Sales of secured bonds have dropped to 28 percent of speculative-grade issuance from 41 percent last year as default rates plummet amid signs the economy isn’t slipping back into recession.…it-markets.html

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