New York : Hartford Financial Services Group, the insurer bailed out by the US Treasury in June, and aircraft lessor International Lease Finance Corporation (ILFC) tapped the corporate bond market last week, showing growing investor confidence the US economy won't fall back into recession.

Hartford Financial, based in Hartford, Connecticut, sold $1.1 billion (Dh4.03 billion) of notes and ILFC, a Los Angeles-based unit of American International Group, issued $2 billion of debt, according to data compiled by Bloomberg.

US corporate bond sales topped the 2010 average for the second consecutive week as borrowing costs touched the year's low.

Investors are willing to lend to companies that turned to government aid to survive amid frozen fin-ancial markets in a sign that credit-quality concerns are waning, said Guy Lebas, chief fixed-income strategist at Janney Montgomery Scott.

"We've come back past normal and then some," said Lebas.

Yields

The extra yield investors demand to own investment-grade corporate bonds instead of US Treasuries tightened six basis points to 168 basis points, the lowest this year.

Absolute yields fell six basis points to 4.51 per cent after touching the year's low of 4.48 per cent on March 17. A basis point is 0.01 percentage point.

Spreads on high-yield, high-risk debt tightened 13 basis points to 598 basis points, according to the Bank of America Merrill Lynch US High Yield Master II Index. They have fallen 68 basis points since March 1, the index data show. Yields fell to the year's low of 8.63 per cent, down 12 basis points.

High-yield debt is rated below ‘Baa3' by Moody's Investors Service and BBB- by Standard & Poor's.

Sales totalled at least $25 billion, compared with a 2010 average of $24.4 billion through the week ended March 12, according to data compiled by Bloomberg.

Two reports indicated the economy will grow without rising inflation.

Consumer prices were unchanged in February, the first time they didn't increase since March 2009, while the index of leading indicators rose 0.1 per cent last month, the 11th straight gain.