Bank of America, U.S. Bancorp, and Citizens Financial Group have joined the surge in the US investment-grade debt market, collectively selling nearly $10 billion in bonds on Thursday. This move contributes to a weekly issuance exceeding $50 billion, marking the second-busiest January on record with almost two weeks remaining. The trio of banks, along with others, are capitalizing on the positive momentum generated by strong earnings reports.
Bank of America, in a bid to gauge investor appetite, issued $5 billion of senior unsecured fixed-to-floating rate notes. These notes yield 133 basis points over comparable Treasuries, an improvement from initial pricing discussions of around 155 basis points, as reported by an anonymous source familiar with the matter.
U.S. Bancorp and Citizens also entered the market with debt offerings on the same day. U.S. Bancorp presented a $3.5 billion debt offering in two segments, with the longest portion being an 11-year note yielding 153 basis points over comparable Treasuries. Citizens sold $1.25 billion of fixed-to-floating rate notes with a yield of 180 basis points over comparable Treasuries, surpassing initial pricing discussions of around 210 basis points.
This week has witnessed significant debt issuance activity among major Wall Street players, with JPMorgan Chase & Co., Wells Fargo & Co., and Morgan Stanley collectively selling about $23 billion in new bonds on Tuesday. PNC Financial Services Group Inc. followed suit with a $2.5 billion deal on Wednesday, marking the first domestic regional lender to enter the bond market this year.
Weekly issuance has exceeded expectations, reaching nearly $50 billion, far surpassing forecasts of $35 billion. A total of 25 deals have been brought to market by blue-chip companies this week.
Despite a positive earnings report earlier in the week, Goldman Sachs Group Inc. is not expected to sell new debt on Thursday, according to Bloomberg’s Michael Gambale. Investors are keenly observing Citigroup Inc. and regional lender Truist Financial Corp., as they may consider issuing debt following their quarterly reports.
