Goldman Sachs Group Inc. and Wells Fargo & Co. are joining rival JPMorgan Chase & Co. in the tapping the US investment-grade bond market after reporting second-quarter earnings.
Goldman is selling notes in as many as two parts, according to a person with knowledge of the matter. The longest portion of the offering, an 11-year security, may yield around 1.45 percentage point above Treasuries, said the person, who asked not to be identified as the details are private.
Proceeds from offering will be used for general corporate purposes and Goldman is the sole underwriter of the deal, added the person.
Goldman’s trading unit powered a surge in earnings in the second quarter. Both fixed-income and equity traders outpaced analysts’ estimates, while a rebounding capital-markets business helped drive better-than-expected results across much of the company’s Wall Street operations.
Wells Fargo, meanwhile, is tapping the US high-grade market a day after it raised €2.75 billion ($3 billion) in the European debt market.
JPMorgan kicked off the issuance spree from the big banks on Monday, borrowing $9 billion in a four-part offering that garnered over $28 billion in investor demand. The longest portion of the deal, an 11-year tranche, drew upwards of $12 billion in orders. That allowed the lender to pay just low single-digit concessions to sell the debt, Bloomberg’s Brian Smith wrote in a note.
The top banks are expected to borrow more than they usually do after they post earnings as they take advantage of falling yields and get ahead of upcoming US elections that could potentially bring market turmoil. JPMorgan credit analyst Kabir Caprihan expects $21 billion to $24 billion of issuance from the six biggest domestic banks, more than the 10-year July average of roughly $17 billion.
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