Goldman Joins Post-Earnings Bank Bond Frenzy With Five-Part Sale
Goldman Sachs Group Inc. is tapping the U.S. investment-grade bond market, joining peers Bank of America Corp. and Morgan Stanley in selling new debt after reporting strong third-quarter results. The bank is selling bonds in as many as five parts, according to a person familiar with the matter. The longest portion of the offering, a fixed-to-floating-rate security due 2032, may yield around 120 basis points above Treasuries, said the person, who asked not to be identified because they’re not authorized to speak about it. Proceeds from the self-led sale are marked for general corporate purposes, the person said. Goldman Sachs reported blowout results last week. The investment-banking division reported an 88% surge in revenue from last year, driven by advisory fees, and the trading business beat forecasts with a 23% revenue jump.
The bond sales from Goldman and Morgan Stanley may be used to fund the banks’ prime brokerage businesses, according to Bloomberg Intelligence analyst Arnold Kakuda. Both banks are seeing increased prime brokerage activity after the implosion of Archegos Capital Management led to heavy losses and forced internal probes at several prime brokerages. “Goldman reported solid results on Friday, especially in trading. I think continued prime brokerage funding is behind the sale,” Kakuda said in an interview. JPMorgan Chase & Co. and Citigroup Inc. are also candidates to sell debt before year-end as the look to boost their cash holdings to support ballooning balance sheets, he added.
https://www.bloombergquint.com/onweb/goldman-joins-post-earnings-bank-bond-frenzy-with-five-part-sale