The 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.

Banco Santander is selling 2 billion euros ($2.5 billion) of two-year senior, unsecured bonds in the first public offering from a Spanish bank in more than five months, according to a banker familiar with the matter. Paris-based SocGen, France's second-biggest bank, offered a benchmark-sized note in euros due in February 2018, said another banker, who asked not to be named because he's not authorized to discuss the transaction.

Most Traded

Bonds of Laboratory Corp. of America Holdings were the most actively traded dollar-denominated corporate securities by dealers yesterday, with 79 trades of $1 million or more, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The Burlington, North Carolina-based provider of medical testing services sold $1 billion of debt in its first offering in almost two years.

The U.S. two-year interest-rate swap spread, a measure of debt market stress, rose 0.25 basis point to 21 basis points. The measure narrows when investors favor assets such as corporate bonds and widens when investors seek the perceived safety of government securities.

The Standard & Poor's/LSTA U.S. Leveraged Loan 100 index rose for the 11th time in 12 days, increasing 0.02 cent to 94.94 cents on the dollar, the highest since June 3, 2011. The measure, which tracks the 100 largest dollar-denominated first- lien leveraged loans, has climbed from 91.8 on June 5, the lowest since Jan. 6.

Leveraged loans and high-yield, high-risk, or junk, bonds are rated below Baa3 by Moody's Investors Service and lower than BBB- at S&P.

Higher Returns

Cat bonds have returned 5.3 percent since the end of March, following a 0.45 percent gain in the first quarter, according to the Swiss Re index.

Company debentures from the most creditworthy to the riskiest have returned 4 percent since March 31, following a 3 percent gain in the first three months of the year, according to the Bank of America Merrill Lynch U.S. Corporate & High Yield Master index.

The outperformance this month is the most since cat bonds lost 0.03 percent in November while company debt plummeted 1.94 percent, according to Swiss Re and Bank of America Merrill Lynch index data.