Bank of America Corp. Friday borrowed $ 15 billion in the corporate bond market, breaking the record set a day earlier by one of the biggest financial rivals for the largest bank bonds ever sold.
The six-part sale, rated A2, A minus, and A plus, attracted orders far outweighed supply, allowing bankers to redial the difference the bond would give to homeowners. investment, on the risk-free budget
indicates someone with direct knowledge of transactions.
Valuation on BofA’s
the largest $ 4.5 billion bond maturing April 2032 is set to settle at a 110 bps spread on the risk-free Treasury, down from initial expectations in the zone. field of 125 basis points.
The bank giant said the proceeds would be used for the company’s general purposes, in a regulatory filing. That could include its funding a new $ 25 billion worth of share buyback program, was announced earlier this week together with the bank Reported profits doubled in the first quarter compared with a year ago. It also frees up $ 2.7 billion of its reserves, boosting its profits.
The Dow Jones Industrial Average
and S&P 500 index
both closed at a new record high on Friday, after a week in which major banks’ earnings help provide an optimistic tone around the US economic recovery.
Large bond sales from Bank of America follow JPMorgan Chase‘S
The $ 13 billion bond deal on Thursday, Bloomberg says this is the largest ever from a major loan company. It held that record in just one day.
According to analysts at CreditSights, major US banks issued $ 39 billion of premium secured debt in the first quarter of 2021, down from $ 63.2 billion in the first three months of the year. 2020, according to analysts at CreditSights.
Analysts at CreditSights said it is expected that at least some banks will issue debt this year to meet legal needs, after the Federal Reserve chose not to renew an exemption ending March 31 that allowed banks during the pandemic to exclude Central Bank Funds and deposits from calculating an important measure of bank capital, known as additional leverage (SLR).
However, Bank of America has no plans to use the proceeds from its new debt offering to offset the SLR change, according to a person familiar with the transaction.
CreditSights analysts wrote that the Bank of America regulated capital already included “a surplus so that legal need is not an issue,” in a Friday note.