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

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https://finance.yahoo.com/news/bofa-joins-morgan-stanley-post-135004867.html

(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 bought 11-year fixed-to-floating-rate notes to yield 1 proportion level above Treasuries, after preliminary value discussions within the space of 1.15 proportion factors, in line with an individual conversant in 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 massive U.S. banks could spur much more bond issuance from the monetary sector, with borrowing prices nonetheless engaging at the same time as some market charges rise. Benchmark 10-year Treasury yields reached the very best since mid-year this week. The bond deal comes as threat premiums in company debt stay low, rising the attraction to issuers.

Morgan Stanley on Thursday took benefit of favorable gross sales circumstances to cost $5 billion of debt in a deal that carried out properly and priced at a degree 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 massive U.S. banks look to spice up their money holdings to assist ballooning stability sheets.

“I wouldn’t be shocked to see JPMorgan concern senior debt they usually may also do sub or most popular notes,” Kakuda stated. “Citi could do one bond deal till 12 months finish whereas Financial institution of America could begin slowing down going ahead. Wells Fargo will most likely not concern the remainder of the 12 months.”

(Updates to incorporate remaining pricing info.)

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