Some signs may be negative but some are positive and $100 Billion worth of corporate bond sales in may seems to point in the latter direction pretty loudly at least in terms of risk taking , non wonders investors feel like they're walking a tight rope .

May High-Grade Bond Sales Stay Positive, Could Top $100 Billion

A sense that the worst of the economic decline may be behind us, coupled with low funding costs for borrowers, have helped restore favorable conditions for companies in need of financing for the first time since credit markets seized up in the fall of 2008.

Issuers from all sectors in the safer high-grade area have flocked to the debt market, finding demand from eager buyers no longer satisfied with the low returns currently offered on government bonds, considered the safest of all investments.

U.S. dollar denominated investment-grade supply stands at $93.71 billion so far this month, according to data provider Dealogic. Monthly totals for May 2007 and 2008 were $101.5 billion and $127.9 billion, respectively.

The European Investment Bank, or EIB, sold $3.5 billion of five-year notes on Wednesday and Goldman Sachs (GS) reopened their existing 7.50% bond offering due 2019 for $1 billion Wednesday.

The high volume in May comes on the heels of two strong months this year, with just over $85 billion sold in January and almost $86 billion in March.

The totals for May don't include the debt sold by financial institutions via the Federal Deposit Insurance Corporation Temporary Liquidity Guarantee program, designed to encourage issuance and restore liquidity to the sector.

For the first time since the inception of the FDIC's program in November 2008, monthly issuance of non-guaranteed debt has outpaced that of government-backed bank paper - another indication that investor confidence is on the rise.

"Whether or not one agrees with the economic, political or social ramifications of some of the actions of central banks and government policymakers globally, the imminent global financial system collapse scenario currently seems unlikely," said Tom Murphy, sector leader and portfolio manager at RiverSource Investments.

While the special government-backed bank debt is technically classified as investment grade, it's more akin to agency debt as it carries AAA ratings and is backed by the federal government. A total of $3.6 billion of FDIC-backed debt has been sold so far this month, according to Dealogic.

Murphy at RiverSource Investments said the utility, energy, food and beverage, and telecom sectors are currently offering good value. "Outside of the banking sector corporate America is in pretty good shape," he said. "Investors are again chasing risk."

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