JPMorgan Chase issued $13 billion of bonds this week.
David Paul Morris/Bloomberg
Three large banks have taken advantage of a recent dip in Treasury yields to sell bonds after their earnings reports this week.
That extra cash could help them pass the Federal Reserve’s stress tests, which would allow them to raise dividends and buy back shares later this year.
Bank of America (ticker: BAC) sold $15 billion of bonds across six tranches, the biggest sale ever for a bank, according to Bloomberg. On Thursday, JPMorgan Chase & Co. (JPM) sold $13 billion of bonds across five tranches, which was the largest on record until Bank of America’s Friday offering. Goldman Sachs (GS) sold $6 billion of bonds in two tranches. Goldman’s bonds were fixed rate, and the others had a mix of fixed- and floating-rate (and fixed-to-floating) debt.
All three banks came to market after beating analysts’ earnings forecasts this week. Investors have been upbeat about the outlook for Wall Street banks this year, even after the reimposition of capital requirements on deposits and Treasury holdings that the Fed had temporarily eased last year. If the banks pass the Fed’s next round of stress tests, the central bank will lift the limits on dividends and buybacks that were originally imposed during the Covid-19 crisis last year.
In notes about the JPMorgan and Goldman Sachs offerings, analysts at CreditSights said they expect those banks to be among the largest issuers in the market this year.
Companies in general have had easy access to capital markets this year; the junk-bond market, for example, has seen its strongest pace of issuance on record.
Write to Alexandra Scaggs at [email protected]
