(Bloomberg) – JPMorgan Chase & Co. sold $8 billion of U.S. investment-grade corporate bonds on Tuesday after reporting earnings on Friday, paving the way for a potential flood of issuance from major Wall Street banks.
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The U.S. largest lender by assets sold the bonds in four parts, a person with knowledge of the matter said. Previous investor talks ranged in size from $6 billion to $7 billion, according to separate people familiar with the matter. The bank secured approximately $34 billion in orders, allowing it to increase the final deal size.
The longest part of the offering, an 11-year fixed-to-floating rate security, yields 0.92 percentage points above Treasuries, after initial discussions of about 1.15 to 1.20 percentage points, said one of the people, declining to be identified when discussing private details.
A JPMorgan spokesperson declined to comment.
The bond sale comes after the bank reported a surprise increase in net interest income for the third quarter and raised its forecast for its main revenue source, even as U.S. interest rates were expected to continue falling.
JPMorgan, together with Goldman Sachs Group Inc., Bank of America Corp. and Citigroup Inc. equity and fixed income trading results that exceeded analyst expectations for the three months ended September 30. For every company’s stock traders, this was the best third quarter on record.
Top Wall Street banks could borrow $20 billion to $24 billion after the results are released, more than the $15 billion they typically raised in October over the past decade, JPMorgan credit analyst Kabir Caprihan wrote in a research note last week. Lenders are benefiting from tight credit spreads and strong investor demand.
JPMorgan is the sole bookrunner on the bond sale and plans to use the proceeds for general corporate purposes, a person familiar said.
(Updates with final pricing details.)
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