Banco Bilbao Vizcaya Argentaria led banks opening bond issuance in Europe after the holiday period as the global credit rally entered a record 14th month and yields on financial debt held near record lows.

BBVA, Spain’s second-biggest lender, sold €1.5 billion of five-year bonds, according to data compiled by Bloomberg.

BNP Paribas, the largest French bank, and Société Générale also entered the market, helping push sales to about €6.3 billion, compared with last year’s daily average of €2.8 billion, data shows.

The yield on European financial debt is 2.1 per cent, according to Bank of America Merrill Lynch’s Euro Financial index, having dropped to a record 2 per cent on December 28th.

Investors are snapping up bank offerings as yields on government bonds fall, with France selling October 2022 securities yesterday at an all-time low of 2.07 per cent.

“Banks are always keen to make a start on funding, and with all the focus on liquidity in recent years, CEOs want to provide reassuring updates for current year funding when they announce full year results in a few weeks’ time,” said Roger Francis, a strategist at Mizuho International in London.

BBVA bonds were priced to yield 295 basis points more than the benchmark swaps rate after initial marketing at about 310 basis points, said people familiar with the deal.

The bank sold €1.5 billion of 4.375 per cent bonds due in 2015 in September that were priced to yield 380 basis points above swaps, according to data compiled by Bloomberg.

The deal had €5 billion in bids from more than 400 investors. Bonds sold by companies from the US to Europe and Asia have returned 14.3 per cent since the end of November 2011, the last month in which the debt recorded a loss, according to Bank of America Merrill Lynch index data.

The longest previous stretches of gains ending in 2003, 2005 and 2009 each lasted eight months. – (Bloomberg)