Volkswagen AG is selling Europe's first corporate bonds of the new year as company borrowing costs relative to government debt fell to the lowest since April 2008.
The German carmaker was the region's biggest issuer of debt last year, selling 9.8 billion euros ($12.8 billion) of bonds, and it has 6.5 billion euros of notes maturing this year, according to data compiled by Bloomberg.
The relative yield on European corporate bonds over government debt has fallen to 137 basis points, according to Bank of America Merrill Lynch's Euro Corporate index, compared with 301 basis points at the start of 2012. The new issuance market has been dominated by banks so far this year and UniCredit SpA was in the market today with a 1 billion-euro covered bond deal.
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