(Bloomberg) -- Corporate bond sales worldwide are poised to set an annual record as soon as this week as companies lock in borrowing costs that forecasters say are bound to rise.

Amazon.com, Volkswagen and Alibaba have propelled offerings to $3.96 trillion this year, about $7 billion short of the peak of $3.97 trillion in 2012, according to data compiled by Bloomberg. Company bond sales in the U.S. have already set annual records.

In a year when debt underwriters from Bank of America to Barclays predicted a slowdown as the Federal Reserve scaled back from its debt purchases, issuance has soared as a decline in benchmark borrowing costs that almost no one anticipated pushed yields close to record lows. While central banks in Europe and Japan have stepped up their own stimulus efforts, the likelihood the Fed will raise interest rates next year has fueled the borrowing binge by companies globally.

“It’s like a constant ‘look-over-your-shoulder’ type scenario,” Jody Lurie, a corporate credit analyst at Janney Montgomery Scott in Philadelphia, said in a telephone interview. “It continues to encourage companies to not risk missing the opportunity” to sell bonds.

YIELDS DECLINE

While yields on 10-year Treasuries, the benchmark for trillions of dollars of debt securities, have confounded Wall Street prognosticators by falling 0.7 percentage point this year to 2.3%, they’re still forecasting yields will rise to 3.17% by the end of 2015.

Borrowers from the most-creditworthy to the neediest have benefited as corporate yields also declined. Globally, corporate bonds now yield just 2.7%, within 0.2 percentage point of its record low last year, according to the Bank of America Merrill Lynch Global Corporate Index. Since 1996, yields have averaged about 4.7%.

In the U.S., home to the world’s biggest corporate bond market, borrowers have issued $1.5 trillion of debt, data compiled by Bloomberg show. Investment-grade companies have already sold a record $1.18 trillion of bonds.

DEFY PREDICTIONS

The 1.4% increase from 2013 has defied predictions from Charlotte, North Carolina-based Bank of America, which said last December that investment-grade offerings may fall as much as 16 percent, and London-based Barclays, which estimated an 8 percent decrease. Both firms have since revised their forecasts.

Sales of junk bonds in the U.S., debt rated below BBB- by Standard & Poor’s and Baa3 at Moody’s Investors Service, are at $344.4 billion, compared with $319.3 billion during the same period last year, Bloomberg data show.

“It’s continued insatiable appetite for yield,” Patrick Maldari, a New York-based money manager at Aberdeen Asset Management, which oversees more than $500 billion.

Amazon raised $6 billion in a five-part offering yesterday, tapping the bond market for the first time since 2012, Bloomberg data show. The sale was the biggest for the Seattle-based maker of the Kindle e-book reader, which last sold $3 billion of notes in 2012, Bloomberg data show.

AMAZON BONDS

Amazon’s note sale include a $1.5 billion portion of 4.95 percent, 30-year bonds that yields 205 basis points more than similar-maturity Treasuries, Bloomberg data show. A basis point is 0.01 percentage point.

Corporate bond issuance is also booming in Europe, with sales of 846 billion euros ($1 trillion) this year, up from 760 billion euros in all of 2013 and the most since 2010, Bloomberg data show. Average yields on investment-grade bonds in euros fell 0.9 percentage point this year to 1.2%, 0.04 percentage point from a record low reached last month, index data compiled by Bank of America show. Those on junk-rated debt dropped 0.3 percentage point to 3.98% versus the five- year average of 7.2%.

Volkswagen, Europe’s biggest car manufacturer was among the largest corporate borrowers worldwide after raising more than $26 billion in currencies from dollars to yen.

Alibaba, the online marketplace operator founded by billionaire Jack Ma, raised $8 billion in October in Asia’s largest ever U.S. dollar-denominated bond offering.

The company was able to lower the premium from the spread it initially offered to investors on its longest-dated bond by as much as 0.27 percentage point, said a person with knowledge of the sale, who asked not to identified because the details are private.

RATE INCREASE

Financing costs may rise as a strengthening U.S. economy prompts the Fed to start increasing benchmark interest rates for the first time since 2006. Investors are pricing in that the first rate increase will come in about 10 months, data compiled by Morgan Stanley show.

Fed Vice Chair Stanley Fischer signaled officials are closer to dropping a vow to keep interest rates low for a “considerable time,” according to a speech at the Wall Street Journal CEO Council Annual Meeting in Washington yesterday.

Investors “are a little bit reluctant as we go into 2015 to load up on anything longer than 10 years,” Peter Burger, managing director and head of debt syndicate for the Americas at HSBC’s U.S. securities unit, said in a telephone interview. “When rates do move, we will get a movement in volumes that are issued. It would not surprise me to see us pull back.”

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