Otter Tail Corp., the provider of energy and electricity services in the Midwest, plans to sell debt as soon as today after corporate yields rose for the first time in nine months relative to government bonds.
Bill Gross, Jeffrey Gundlach and Dan Fuss, whose firms collectively oversee about $1.5 trillion, expect the Federal Reserve to conduct a third round of bond purchases as signs of strength in the U.S. economy fade and Europe’s sovereign-debt crisis returns.
Banks and money managers are having a tougher time trading corporate bonds in large sizes and older issues as Europe’s sovereign debt crisis limits risk-taking, according to JPMorgan Chase & Co. strategists.
Bond managers from Pacific Investment Management Co. to Neuberger Berman Management LLC are sticking with bets that U.S. banks will withstand a European crisis that’s triggered the biggest losses since early 2009.
Investors surveyed by JPMorgan Chase & Co. are the most bullish on investment-grade bonds in more than nine years as they demand the least relative yields since the start of the financial crisis. Arch Coal Inc. plans to raise $300 million in a private offering of secured notes.
The most relentless surge in borrowing costs for U.S. corporate debt in four years is threatening to derail this year’s record pace of sales as concern deepens the Federal Reserve will curtail unprecedented stimulus.