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Animal Spirits Rekindled with Debt-Fueled Growth

Companies use bond proceeds to pay for capital expenditures, signaling increased confidence in the economy.

By Matt Robinson and Thomas Black, Bloomberg | Updated on November 04, 2014

U.S. companies are turning more to the bond market to fund expansions than at any time since 2008, a sign businesses are finally showing some confidence in the economy after hoarding cash for the past five years.

Of the $1.27 trillion of investment-grade bonds issued in the first nine months of the year, companies such as American Transmission Systems Co. and CF Industries Holdings Inc. earmarked as much as 16 percent for capital spending, according to data compiled by Moody’s Analytics and Bloomberg. That compares with 9 percent during the same period in 2013. Companies have invested $900 billion in their businesses this year, a 52 percent increase from 2009, Moody’s data show.

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