Bank of America Corp. is seeking to raise at least $6 billion through an unusual Friday high-grade bond offering, braving the market after a turbulent week in credit markets disrupted fundraising plans for numerous borrowers. No final decision has been made on the transaction’s size, which could still grow depending on demand, according to people familiar with the matter. The lender is marketing debt in as many as four parts, ranging in maturity from three to 11 years.
Bank of America is the third major Wall Street lender to sell bonds this week, which was marked by sharp swings in Treasury yields and a surge in credit risk for blue-chip issuers on hotter-than-expected inflation data and mounting concerns about the sustainability of a massive spending on artificial-intelligence infrastructure. It was the only one of the Big Six that didn’t tap the market in the third quarter, raising just $17 billion so far this year — the least among the group.
The firm’s latest offering was in April, when it raised $10 billion. JPMorgan Chase & Co. and Morgan Stanley earlier this week raised a combined $10 billion through bond offerings. The Big Six, which also includes Goldman Sachs Group Inc., Citigroup Inc and Wells Fargo & Co., often time their borrowing to follow quarterly reports. The group is projected by Barclays Plc to raise about $41 billion through high-grade bond sales this quarter, or 30% more than the average for the period since 2015.
Bank of America shares slumped earlier this week after reporting third-quarter earnings that missed analyst projections, with both its stock and fixed-income tradings falling short of estimates. The firm’s bond sale is set to be just the fifth high-grade offering to price on a Friday this year, according to data compiled by Bloomberg. The last was a July offering from a Deere & Co. unit. Bank of America didn’t immediately respond to a request for comment.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing