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The heart of Canada’s financial district at the corner of King and Bay streets in Toronto.KEVIN VAN PAASSEN/The Globe and Mail

With interest rates soaring, investment-grade corporate debt sales are down.

Globally, top-rated corporate debt is down 2 per cent so far this year from last year. But demand for high-yield bonds, interestingly, looks strong. There has been a 31-per-cent increase in high-yield new issuance, according to figures Friday from Thomson Reuters.

Leveraged loans are also way up, climbing 58 per cent year over year, the figures show.

It appears that the economic improvement that is driving up rates is also enabling leveraged companies to tap credit markets more easily – by easing investors' concerns about credit quality.

High-yield bonds in general have been holding in quite well as rates rise on government bonds, and it appears investors are more than willing to keep soaking them up.

(Boyd Erman is a Globe and Mail Capital Markets Reporter & Streetwise Columnist.)

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