BofA Sells $3.25 Billion of Bonds After Sturdy Earnings Report – Yahoo Finance

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(Bloomberg) — Financial institution of America Corp. tapped the U.S. investment-grade bond market Friday with a $3.25 billion self-led deal, becoming a member of Morgan Stanley in issuing new debt following a better-than-expected earnings report.

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The financial institution offered 11-year fixed-to-floating-rate notes to yield 1 proportion level above Treasuries, after preliminary worth discussions within the space of 1.15 proportion factors, in keeping with an individual acquainted with the matter. The proceeds are earmarked for common company functions.

BofA on Thursday beat analysts’ earnings estimates as charges climbed on the firm’s dealmaking unit, boosted by a record-breaking interval for mergers and acquisitions.

Blowout outcomes from the large U.S. banks might spur much more bond issuance from the monetary sector, with borrowing prices nonetheless enticing at the same time as some market charges rise. Benchmark 10-year Treasury yields reached the best since mid-year this week. The bond deal comes as danger premiums in company debt stay low, growing the enchantment to issuers.

Morgan Stanley on Thursday took benefit of favorable gross sales situations to cost $5 billion of debt in a deal that carried out nicely and priced at a stage tighter than initially mentioned.

JPMorgan Chase & Co. and Citigroup Inc. are additionally candidates to promote debt earlier than year-end, Bloomberg Intelligence’s Arnold Kakuda stated Thursday, as giant U.S. banks look to spice up their money holdings to assist ballooning stability sheets.

“I wouldn’t be stunned to see JPMorgan problem senior debt they usually may do sub or most well-liked notes,” Kakuda stated. “Citi might do one bond deal till 12 months finish whereas Financial institution of America might begin slowing down going ahead. Wells Fargo will in all probability not problem the remainder of the 12 months.”

(Updates to incorporate remaining pricing info.)

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