On Tuesday, the three biggest U.S. banks raised $23.25 billion in new notes, marking the beginning of what is anticipated to be a busy week for bank debt issuance.
In addition to senior unsecured fixed-to-floating rate paper, Wells Fargo solicited $8 billion in fixed and floating-rate notes from the bond market on Tuesday.
Morgan Stanley offered $6.75 billion in fixed notes and floaters, while JPMorgan sold $8.5 billion in fixed and floating-rate notes. Four tranches of senior unsecured notes with varying maturities were sold by both banks as bonds.
The transactions come after a lengthy schedule of earnings announcements from these and other globally significant banks (GSIBs) on Fridays and Tuesdays.
Apart from Wells Fargo, JPMorgan, and Morgan Stanley, Bank of America, BNY Mellon, Citigroup, and Goldman Sachs are among the other banks that released their fourth-quarter profits on Friday and Tuesday.
In the past, banks have often issued the most bonds in January. Data from Informa Global Markets shows that the “Big Six” banks (JPMorgan, Citi, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley) have issued $22.58 billion in January on average during the past seven years.
According to Informa statistics, the Big Six only raised $9 billion in January of last year, making it an anomaly.
On Tuesday, at least eleven investment-grade (IG) bond offerings—including those from Morgan Stanley, JPMorgan, and Wells Fargo—are anticipated to price.
Among them are a $400 million 10-year senior note for real estate investment firm Extra Space Storage and a $500 million three-year bond for cereal manufacturer General Mills.
According to statistics from Informa Global Markets, Tuesday saw a total of $30.38 billion in fresh sales of IG corporate debt, increasing the total for January to $133.67 billion.
The week was cut short by holidays, but the supply is still high. The average supply of investment-grade bonds issued since 2016 has been $24.6 billion during the week of Martin Luther King Jr. Day, according to Daniel Krieter, director of fixed income strategy at BMO Capital Markets.