Broadly rosier sentiment about Europe's ability to contain its debt crisis prompted a rash of companies to issue debt Monday, with the combined tally of disclosed corporate-bond sales reaching $20.75 billion.

Nearly $18 billion of those deals were on track to price in Monday's session--$16 billion from investment-grade companies and $2 billion from speculative-grade, or junk, bond issuers--putting the day on track to be the third busiest for combined corporate issuance so far this year, according to data provider Dealogic.

Leading the charge on the high-grade side were funding units of Israeli drug maker Teva Pharmaceutical Industries Ltd. (TEVA, TEVA.TV), with $5 billion of new debt and proceeds earmarked for paying down debt used to close on its recent acquisition of Cephalon Inc.; biotechnology company Amgen Inc. (AMGN), which was marketing $6 billion in new three-, five-, 10- and 30-year debt to fund a tender offer for $5 billion of its own shares; and UnitedHealth Group Inc. (UNH), with a $1.5 billion deal.

In the high-yield market was coal giant Peabody Energy Corp. (BTU), with a $2.75 billion deal slated to price Tuesday to help fund its interests in Macarthur Coal Ltd. (MCC.AU), and WPX Energy Inc., with a $1.5 billion deal partly to finance a special payment to its parent, Williams Cos. (WMB), expected to price later this session.

Pressure on Italian Prime Minister Silvio Berlusconi to resign and expectations for a more-unified Greek government helped to lay the foundations for what promised to be a strong day for corporate issuance.

"We're always one Europe headline away from the market pulling back and the window for issuance closing, so companies are better off coming sooner than later," said Dave Sekera, a bond strategist at research company Morningstar Inc.

Friday's deals, including a $2 billion issue from Dow Chemical Co. (DOW), were well received amid pent-up demand and didn't lead to big new-issue concessions, under which companies have to pay a premium to entice investors into new debt deals.

Borrowers have been especially sensitive recently to market conditions, deciding whether to issue or not based on the severity of euro-zone headlines, and that led to busy Thursdays in the last two weeks but a slump early each week.

Companies issued $13.8 billion of bonds on Oct. 27, for example, and $12.5 billion on the next Thursday, Nov. 3, according to data provider Dealogic. That made those two days the fourth and seventh busiest in volume terms for all of 2011.

This Monday arrived with a more-positive tone, however. The investment-grade market "would seem to be benefiting from an agreement on a national unity government in Greece, despite a tremendous amount of work ahead of them, and rumors that Berlusconi will step down," said Adrian Miller, senior vice president at Miller Tabak Roberts Securities LLC.

Also in the market Monday were Newcrest Finance Property Ltd., a unit of Newcrest Mining Ltd. (NCM.AU, NCMGY), with $1 billion of 10- and 30-year bonds; Canadian National Railway (CNI, CNR.T), with $700 million in five- and 10-year bonds; and Zimmer Holdings Inc. (ZMH), with $550 million in three- and 10-year debt.

Separately, Dr Pepper Snapple Group Inc. (DPS) sold $500 million in seven- and 10-year bonds to retire 1.7% notes maturing Dec. 21; Philip Morris International Inc. (PMI) was in the market with a benchmark offering and KKR Finance was marketing $225 million of 8.375% bonds that, with a greenshoe option--allowing underwriters to increase the amount of securities sold on demand--will take the deal to $250 million.

Sekera said the deal from Dr Pepper should be "well oversubscribed," citing the "strong bid in the market for high-quality, defensive names."

The average corporate bond in Morningstar's corporate-bond index is trading with a risk premium of 217 basis points, or 2.17 percentage points, over comparable government debt. With 10-year government debt now yielding about 2%, this puts the average nominal interest rate or coupon on corporate bonds in the index just over 4%.

-By Katy Burne, Dow Jones Newswires; 212-416-3084; katy.burne@dowjones.com

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