Tobacco Bonds

The Markit iTraxx Europe Index of 125 companies with investment-grade ratings increased one to 149 at 11:34 a.m. in London. Both indexes typically fall as investor confidence improves and rise as it deteriorates. Credit swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.

Bonds of Caracas-based Petroleos de Venezuela SA were the most actively traded dollar-denominated corporate securities by dealers, with 214 trades of $1 million or more, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Altria sold $1.9 billion of 2.85 percent, 10-year notes to yield 130 basis points more than similar-maturity Treasuries and $900 million of 4.25 percent, 30-year bonds with a 168 basis- point spread, Bloomberg data show. The debt may be rated Baa1 by Moody's Investors Service, three levels above speculative grade, the data show.

Celgene, the maker of cancer-fighting drugs Istodax and Abraxane, sold $1.5 billion of bonds in its first offering since October 2010. The company issued $500 million of 1.9 percent, five-year notes to yield 130 basis points more than Treasuries and $1 billion of 3.25 percent, 10-year debt at 170 basis points, Bloomberg data show.

Lending Standards

Companies from the most creditworthy to the riskiest are tapping debt markets after yields on dollar-denominated bonds reached a record low 3.9 percent on Aug. 2, down from 4.8 percent at the end of 2011, Bank of America Merrill Lynch index data show. Corporate issuers have sold $813 billion of debt in the U.S. this year, up 3.4 percent from last year, data compiled by Bloomberg show.

The Fed said yesterday in Washington in its quarterly survey of senior loan officers that: "Domestic banks, on balance, continued to report having eased their lending standards across most loan types over the past three months."

'Additional Accommodation'

Banks in the U.S. are lending the most since the recession ended in June 2009, supporting an economy burdened by 8.3 percent unemployment. Fed policy makers including Chairman Ben S. Bernanke weighed the results of the survey at their July 31- Aug. 1 meeting at which they said they "will provide additional accommodation as needed" to support the economy.

The Standard & Poor's/LSTA U.S. Leveraged Loan 100 index added 0.09 cent to 94.60 cents on the dollar. The measure, which tracks the 100 largest dollar-denominated first-lien leveraged loans, has returned 6.8 percent this year.

Leveraged loans and high-yield bonds are rated below Baa3 by Moody's and lower than BBB- by S&P.