Global high-yield corporate debt sales hit a record quarter Thursday, with $113.8 billion sold over the past three months, according to data provider Dealogic.

Investment-grade issuance for the quarter was $279 billion, the third highest on record and up 19% on the $234 billion raised this quarter last year. Dollar-denominated debt sold by banks or corporations based outside the U.S., or Yankee issuers, accounted for 49% of that volume, Dealogic said.

The high-yield volume snuck past the previous record from the fourth quarter of 2010, despite shaky market conditions stemming from the nuclear crisis in Japan, Middle East and North African turmoil and continued sovereign debt woes in Europe.

"A significant amount of the first quarter volume was from companies looking to refinance," said Jason Rosiak, senior managing director at Pacific Asset Management, an affiliate of Pacific Life with $2.5 billion under management.

Investment-Grade Bonds

Campbell Soup Co. (CPB) sold $500 million of senior unsecured notes Thursday, and Macquarie Bank Ltd. sold $1 billion of unsecured U.S. medium-term notes.

Macquarie's 10-year issue was a Rule 144a private sale and priced to yield 6.652%, or 3.20 percentage points over comparable government debt. That was five basis points narrower than the level suggested by preliminary price guidance, indicating solid demand for the offering.

Asciano Finance Ltd. was also in the market to sell $1 billion of seven-year notes. Price guidance suggests a risk premium in the area of 2.25 percentage points over Treasurys.

Junk Bonds

The U.S. high-yield issuance pipeline was strong. Several deals were expected to price late Thursday, including Ameristar Casinos Inc. (ASCA), with a $800 million bond sale in the 8% area via Wells Fargo; Visteon Corp. (VC) with a $500 million debt offering expected to price around 6.75% via Bank of America Merrill Lynch; CNL Lifestyle Properties with a $400 million deal in the 7.25% area via Jefferies & Co.; and Kennedy-Wilson with a $200 million deal.

Millar Western Forest Products completed a $210 million issue, pricing the debt at 8.5%, and Park-Ohio Industries Inc. sold $250 million of senior notes at 8.125%.

Asset-Backed Securities

The U.S. Small Business Administration has begun tapping the securitization market with a $252.38 million bond. The deal has the full faith and credit of the U.S. government and will be priced next week.

Mortgage-Backed Securities

There was steady buying of agency mortgage-backed securities Thursday despite the quarter end, said Paul Jacob, director of strategy at Banc of Manhattan Capital. "Whatever flight to quality we had a few weeks ago has abated," he said. "Origination flows and refinancing risk remains modest." Risk premiums were quoted at 143 basis points versus 144 basis points Wednesday.

Commercial Paper

The U.S. commercial paper market grew on a seasonally adjusted basis but shrank on an unadjusted basis in the week ended March 30, according to Federal Reserve data.

In the week, the commercial paper market grew by $1.7 billion on a seasonally adjusted basis. On an unadjusted basis, it shrank by $700 million.

At its peak in July 2007, this market was a little over $2 trillion in size.

Treasurys

Benchmark Treasurys were flat Thursday as the bond market prepared for a key U.S. employment report. The non-farm payrolls report due Friday morning will shed light on the health of the labor market and shape market expectations on the Federal Reserve's monetary policy outlook.

Economists in a Dow Jones Newswires survey expect the payrolls report to show U.S. employers added 195,000 new jobs in March, following 192,000 new hires in February. The unemployment rate is forecast to stay unchanged at 8.9%.

"Given the slowdown in the rate of economic growth over the last few data points, the payrolls report will be an important confirmation or contradiction of any slowdown in employment," said Christian Cooper, head of U.S. dollar derivatives trading at Jefferies & Co. in New York.

Cooper said a strong number will reinforce the recent comments from some Fed officials about the need to withdraw liquidity sooner rather than later and the bond market could begin to price in a change in the easy monetary policy.

In late afternoon trading, the 10-year note was flat to yield 3.460%. Bond prices and yields move in opposite directions.

-By Katy Burne, Dow Jones Newswires; 212-416-3084; katy.burne@dowjones.com

--Kellie Geressy-Nilsen, Anusha Shrivastava and Min Zeng contributed to this article.
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