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JPMorgan Chase issued $ 13 billion in bonds this week.
David Paul Morris / Bloomberg
Three large banks have taken advantage of a recent drop 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 collect dividends and buy back shares later this year.
Bank of America
(ticker: BAC) sold $ 15 billion in six-installment bonds, the largest sale ever made to a bank, according to Bloomberg. On Thursday,
JPMorgan Chase & Co..
(JPM) sold $ 13 billion in five-installment bonds, the highest since Bank of America’s Friday offer.
Goldman Sachs
(GS) sold $ 6 billion in bonds in two tranches. Goldman bonds were fixed rate, and the others had a combination of fixed and variable rate (and fixed rate) debt.
All three banks entered the market after exceeding analysts’ earnings forecasts this week. Investors have been optimistic about the outlook for Wall Street banks this year, even after the re-imposition of capital requirements on deposits and treasury holdings that the Fed temporarily eased last year. If banks pass the Fed’s next round of stress tests, the central bank will raise the dividend and buyback limits originally imposed during the Covid-19 crisis last year.
In notes on offers from JPMorgan and Goldman Sachs, analysts at CreditSights said they expect those banks to be among the largest issuers on the market this year.
Companies generally had easy access to the capital markets this year; the unwanted bond market, for example, recorded the strongest issuance rate.
Write to Alexandra Scaggs at [email protected]