GM Generali

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Companies from all sectors of the credit markets continued to belly up to the bar Wednesday to actively sell bonds.

Still historically low interest rates have allowed a multitude of companies to garner cheap funding by selling gobs of bonds to eager investors more than happy to fork over cash in exchange for debt that carries on average double the return of government-guaranteed securities like Treasury bonds.

U.S. dollar-denominated, high-grade supply totaled $113.4 billion in May, according to Dealogic, and given the current market environment, June is on track to top that.

"The buying frenzy continues unabated," according to Tom Murphy, sector leader and portfolio manager at RiverSource Investments. "We have heard June's calendar is going to be huge - and why not? The market is open to anyone and concessions are virtually nil."

High-grade volume totals $3.8 billion so far this month, Dealogic reports.

The difference in risk premium between a newly priced issue and an outstanding one from the same or comparable company, known as the concession, has drastically narrowed over the past several months as investors have also been actively buying debt in the secondary market.

Wednesday's docket includes benchmark-sized deals from Vodafone (VOD), MetLife (MET) and Ameriprise Financial (AMP).

A bevy of foreign issuers are also taking advantage of ideal issuing conditions. Brazil's development bank BNDES is selling a benchmark-sized, 10-year issue and Commonwealth Bank of Australia is selling a 3.5-year issue.

And GMAC LLC, a lender affiliated with General Motors Corp. (GMGMQ), is planning to sell its first government-guaranteed note via the Federal Deposit Insurance Corporation Temporary Liquidity Guarantee program, which was created in an effort to boost issuance and restore liquidity to the banking sector.

The $3.5 billion three-year fixed-rate note was launched at a risk premium flat to midswaps and the $750 million three-year floating-rate note was launched flat to the three-month London Interbank Offered rate. That translates to a 50 basis-point premium over Treasurys.

"We would want to see them closer to U.S. Treasurys plus 80 basis points," according to Jim Vogel, analyst at FTN Financial Capital Markets in Memphis, Tenn. Vogel added that overseas accounts aren't likely to have GMAC on their approved investment lists, government guarantee or not.

Junk-rated GMAC converted to a bank holding company late last year and received permission from the Federal Reserve to issue up to $7.4 billion in debt on May 21. Currently, GMAC's unsecured debt is rated C by Moody's Investors Service and CCC by Standard & Poor's.

The sale of FDIC-backed debt and access to the FDIC's program is crucial to the company's survival, according to James Lee, senior fixed-income analyst at Calvert Asset Management Co. "Otherwise, they would have to tap the market with bonds that yield 11% to 12% and have a large interest expense burden," he said.

Banc of America Securities LLC, Barclays, Deutsche Bank and JP Morgan will serve as joint underwriters for the issue, expected to price later Wednesday.

To be sure, risk premiums on FDIC-backed debt have ratcheted in since the program began.

When Goldman Sachs (GS) sold the first issue via the FDIC program in November 2008, the 3.5-year note was priced at a risk premium of 200 basis points over Treasurys. That issue is now bid at 39 basis points over Treasurys, according to Tradeweb.

-By Kellie Geressy; Dow Jones Newswires; 201-938-2050; kellie.geressy@dowjones.com

(Kate Haywood contributed to this report.)