Bear Stearns Cos. sold $2.25 billion of notes at yields that approach those normally demanded of high-yield, high-risk companies, paying the price for the failure of two hedge funds and the collapse of the subprime mortgage market.

Bear Stearns sold the five-year medium-term notes at a premium, or spread, of 2.45 percentage points more than the comparable U.S. Treasury, according to people familiar with the sale, who declined to be named because the terms are private. The bonds are rated A+ by Standard & Poor’s and A1 by Moody’s Investors Service, the fifth-highest investment grade.

The premium is four times as wide as that offered by New Yorkbased Bear Stearns on a five-year note in January and 0.82 percentage point wider than the average offered by BBB rated companies, which are two steps above junk.

“Bear Stearns needs to shore up confidence and this is an attempt to do that,” said Matt Hastings, who helps manage the $1.4 billion Schwab Total Bond Market Fund at Charles Schwab & Co. in San Francisco.

The firm, whose hedge funds failed after errant trades on subprime mortgage loans, had its credit rating outlook cut to negative last week by S&P on concern that the falling value of mortgage bonds may erode earnings. The firm ousted Co-President Warren Spector August 5 after credit-market losses and waning investor confidence increased pressure for management changes at the second-largest underwriter of mortgages.

Bear Stearns spokesman Russell Sherman declined to comment.

Credit-default swaps on Bear Stearns bonds fell 8 basis points yesterday to 142 basis points, according to broker Phoenix Partners Group. The five-year contracts traded Monday as high as 210 basis points, the highest since at least November 2001.

The contracts, financial instruments based on bonds and used to speculate on the chances of default, imply a rating of Ba2, according to New York-based Moody’s.