Corporate bonds are drawing strong demand from investors looking for higher yields than Treasurys offer as the economy sustains its recovery.

Sales of investment-grade corporate bonds already have hit a full-year record for 2013, according to Dealogic, The Wall Street Journal reports. Junk bond sales are on track for an all-time peak too.

The strong demand for corporates has pushed the interest-rate premiums of corporate bonds over Treasurys to their lowest levels since 2007, before the financial crisis began, according to the paper.

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For high-grade corporates, that premium is 1.21 percentage points, down from 1.45 a year ago, and for junk bonds, it's 3.96 percentage points, down from 5.09 a year ago.

"The fact that spreads are tight suggests that economic conditions should be good for the foreseeable future," Anthony Valeri, fixed-income strategist at LPL Financial, tells The Journal.

Even if interest rates rise, as expected, corporate debt will likely do better than Treasurys, buoyed by higher yields, strategists tell The Journal.

Many are enthusiastic about bonds from highly rated companies with maturities of about seven years or less. Bonds with shorter maturities would be hurt less than long-term bonds would be by a rise in long-term rates.

To be sure, rising interest rates next year could put a damper on corporate debt issuance.

"As we go into 2014, the opportunity for some of these companies to keep issuing debt at very attractive rates is diminishing,” Dan Heckman, a senior fixed-income strategist at US Bank Wealth Management, tells the Financial Times.

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