SocGen , HSBC U.S. Touch Sales to Europe Funds Evaporate

Societe Generale SA and HSBC Holdings Plc issued almost $ 3 billion of bonds denominated in dollars and a growing crisis of sovereign debt sales in Europe declined.

Société Générale, the second largest French bank, sold $ 2 billion of notes in an offering of three parts, the relative yields close to those paid in a similar operation three months ago, before Ireland's fiscal problems affected credit market. London-based HSBC issued $ 1 billion of debt in the sale of reference for the first time by a European bank in the U.S. more than a month.

"The senior unsecured market in Europe appears to be relatively closed for the moment, so the way forward is the dollar market, who is also looking a little more promising," said Jeroen van den Broek, a credit strategist at ING Bank NV in Amsterdam.

Sales in Europe are on track this week to stay over holiday periods excluded in a decade. Borrowers breakfast maker, Kellogg Co. Plc classified garbage Seagate Technology joined the banks in the use of U.S. bond market, the sale of 6.45 billion U.S. dollars of debt the day after President Barack Obama agreed to extend the tax cuts enacted by his predecessor.

Sales HSBC Financial Corp. 's, the reopening of the October issue maturing in January 2021, and the supply of Société Générale are the first reference sales of collateral by European lenders from Paris-based BNP Paribas, the largest world bank by assets, issued $ 650 million of notes on November 5.

European Banks

"These are highly rated institutions with offers relatively simple," said Scott MacDonald, director of credit and economic research at Aladdin Capital Management LLC in Stamford, Connecticut. "The French economy is not sitting in the house the dog and the UK economy appears to be moving in the right direction. If you look at what is entering the market, is the right flavor."

Elsewhere in credit markets, the extra yield investors demand to own corporate bonds worldwide debt instead of similar maturity fell 1 basis point to 172 basis points, or 1.72 percentage points below This year's high of 201 basis points in June, according to Bank of America Global Market Index Merrill Lynch's corporate general. The average yield of 3.94 percent.

Goldman Sachs Group Inc. is offering U.S. bonds loan without government backing, investors following the acquisition of about $ 6 billion in a single trade this month.

Morgan Stanley

The most profitable securities firm in Wall Street history won bidding for the debt after a limited competition that also included Morgan Stanley, according to people familiar with the matter who declined to be identified because the transaction was private. The purchase signals the largest brokers, who mostly stopped making markets in bonds as the global financial crisis peaked in 2008, was encouraged to carry larger inventories after values soared and purchase and sale of reviving.

"That would be a massive trade, an attention-getter," said David Castillo, managing director of San Francisco securities broker, Further Lane. "There is no liquidity in the market and a huge amount of money you are looking to be put to work, despite going on year-end, everyone wants to buy cheap."

Michael DuVally, a spokesman for New York, Goldman Sachs, declined comment. Mark Lake, spokesman for Morgan Stanley, did not immediately return a message.

Most traded bonds

Bond New York, Morgan Stanley, the U.S. bank sixth largest by assets, were the most actively traded U.S. corporate securities by dealers, with 121 transactions of $ 1 million or more, according to Trace, the bond information system in the prices of the Financial Industry Regulatory Authority.

The Barclays Capital Global Aggregate Bond Index lost 0.5 percent this month, bringing the gain this year to 3.67 percent.

Toshiba Corp., the second largest manufacturer of flash memory chips, sold 120 billion yen (1.43 billion) in bonds, increasing the supply of 80 billion yen. The Tokyo-based manufacturer sold 70 billion yen of five-year notes was 0.89 percent with a yield of 15 basis points more than the yen exchange rate, 30 billion yen in seven years, 1.22 percent bond with a spread 23 basis points and 20 billion yen, 10 notes of 1.68 percent with a margin 30 basis points.

junk bonds can win a third consecutive year in 2011, even if inflation accelerates, according to Morgan Stanley.

the high-yield debt, rated below Baa3 by Moody's Investors Service and lower than BBB-by Standard & Poor's, may return a 6 percent next year, assuming an increase of 75 basis points in "risk-free rates," Adam Richmond, a researcher at Morgan Stanley, wrote in a report yesterday. If interest rates remain unchanged, the Bank of New York, sees the speculative-grade bonds earning 9.5 percent.

Bank's risk of debt rises

The cost of insuring the subordinated bonds of European banks and insurance companies rose to 20 months, while the risk of corporate debt in the region fell.

The Markit iTraxx Financial index of credit-default swaps tied to the subordinated notes jumped 9.5 basis points to 320 basis points, while the Markit iTraxx Crossover index of 50 companies contracts mostly junk rating fell 6 basis points one-month low of 451, according to JPMorgan Chase & Co.

Swaps credit-default tend to fall as improving investor confidence and rising as it deteriorates. The contracts pay the buyer face value if a borrower defaults on its obligations, less the value of the defaulted debt. A basis point equals $ 1,000 annually on a contract protecting $ 10 million of debt.

Leveraged loans

The S & P / LSTA U.S. Leveraged Loan 100 Index rose for a second straight day, rising 0.1 cent to 91.96 cents. Prices in the index, which measures the 100 largest dollar loans first lien leveraged, have fallen 92.72 cents on Nov. 9, the highest since May 3.

In emerging markets, the extra yield investors demand to own corporate bonds rather than government bond rose 1 basis point to 227 basis points, according to JPMorgan Chase & Co. index data. The index ended Dec. 7 at 226 basis points narrower level since December 2007.

Spreads on bonds sold by U.S. banks have fallen 11 basis points this month, compared with 4 basis points to debt finance company in Europe, according to data from Bank of America Merrill Lynch index.

The issuance by European banks in the U.S. fell to 2.08 billion U.S. dollars last month, down 86 percent from 14.9 billion U.S. dollars sold in October and a drop of 88 percent of the 17.1 billion U.S. dollars issued in November 2009 . Including a sale of $ 1 billion of bonds backed by Amsterdam-based ING.

Covered bonds are typically backed by mortgages or public sector loans. The security underlying the debt remains with the issuer.

Sales in Europe

The companies have issued € 1,090,000,000 ($ 1,440,000,000) of debt in Europe since 06 December, following € 1,680,000,000 in the past week, at least excluding holiday periods since December 2000.

Société Générale sold $ 250 million in floating rate notes from three years that the performance of 132 basis points above the London interbank offered rate three months, $ 1 billion of debt maturity of 2.5 percent in January 2014, paying 158 basis points more than Treasuries of similar maturity and $ 750 million shares from 3.5 percent two years later due to 175 basis points.

In his last dollar reference offer, based in Paris SocGen issued $ 2 billion of debt on September 7, divided equally into two parts. The 2.2 percent notes due in September 2013 yielded 150 basis points more than Treasury securities and 3.1 percent due two years later became an extension of 170 basis points.

"The feeling of Judgement '

"There is a feeling of impending end of the world market when you have to pay more to get deals done," said Simon Ballard, a credit strategist based in London at RBC Capital Markets. "The whole market has been fairly well founded."

Obama said on Dec. 7 would agree to keep the tax cuts approved by George W. Bush for high-income taxpayers in exchange for extending federal unemployment insurance and cut the payroll tax by $ 120 million dollars a year. The current tax rates, enacted in 2001 and 2003, will increase to 31 December.

Kellogg's $ 1 billion 4 percent, to 10 years are a spread of 88 basis points. The income can be used to fund pension contributions and to pay commercial loans paper used in the repurchase of shares, the Battle Creek, Michigan, maker of Corn Flakes and Rice Krispies, said yesterday in a regulatory filing.

Seagate

Dublin-based Seagate, the world's largest maker of disk drives, sold $ 750 million eight-year senior notes in an attempt to refinance the debt after rejecting purchases of TPG Capital and competitor Western Digital Corp. The bonds are Moody's Ba1, one level below investment grade, and an equivalent BB + by S & P.

Irish Finance Minister Brian Lenihan won the support of legislators on 7 December in the first votes on the budget of 6 million euros to tackle the debt crisis of the country. The government is under pressure to pass legislation such as the tax burden threatens to prolong a fall that the economy has experienced 11 percent reduction in the last three years.

"The risk appetite of European funds and disappear on the basis of the owners," said John Hawley, who helps manage 22 billion U.S. dollars of investment grade credit as a money manager at Aviva Investors in Des Moines, Iowa "is an ongoing issue in terms of what the final solution is for Europe and everyone knows it will take a while for that to work."