GOLDMAN Sachs and Morgan Stanley sold a combined US$11.3 billion in investment-grade bonds on Wednesday (Oct 16), after both banks posted earnings that surpassed analyst expectations.
Both sales came a day after rival JPMorgan Chase issued debt amid strong investor demand, after also reporting better-than-expected third-quarter results.
Goldman sold US$5.5 billion of bonds in two parts, a source said, asking not to be identified discussing private details.
The longer portion of Goldman’s offering, an 11-year fixed-to-floating rate security, yields one percentage point above US Treasuries, the source added, after price talk between 1.25 to 1.3 percentage point.
A spokesperson for Goldman declined to comment.
Goldman’s sale comes a day after announcing its profit jumped 45 per cent in the third quarter, as its stock traders recorded their best quarter in more than three years, while its dealmakers pocketed fees that beat estimates across every key business line.
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Meanwhile, Morgan Stanley sold about US$5.8 billion of debt in three parts on Wednesday, another source said, also asking not to be identified.
The longest portion of the offering, a six-year fixed-to-floating rate security, yields 0.82 percentage point above Treasuries, after earlier discussions in the one-percentage-point area, the source noted.
A spokesperson for Morgan Stanley also declined to comment.
Morgan Stanley’s bond sale comes after the bank on Wednesday morning reported a 32 per cent profit surge for the third quarter. Its wealth unit and fixed-income businesses exceeded expectations while revenue from trading increased by 13 per cent.
The six biggest banks on Wall Street were expected to take advantage of robust investor appetite and tight spreads to sell as much as US$24 billion of bonds after posting results.
JPMorgan’s sale on Tuesday drew about US$34 billion in orders, allowing the Wall Street giant to increase the final deal size to US$8 billion, from earlier discussions of between US$6 billion and US$7 billion. The bank reported earnings on Friday.
Both Goldman and Morgan Stanley are sole bookrunners for their respective offerings, people familiar with the matter said. BLOOMBERG
