(Bloomberg) — Goldman Sachs Group Inc. and Wells Fargo & Co. sold a combined $14 billion of US investment-grade bonds Tuesday, matching the day-earlier total from peers Morgan Stanley and JPMorgan Chase & Co.
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Wells Fargo is issuing $8 billion of bonds in four parts, while Goldman sold $6 billion in three parts, according to people with knowledge of the matter. The market’s third borrower Tuesday, Japanese financial firm Mitsubishi UFJ Financial Group Inc., priced $3 billion of notes.
The longest portion of Wells’ offering, an 11-year security, yields 1.28 percentage point above Treasuries, said one of the people, who asked not to be identified as the details are private. Goldman’s longest portion, a six-year tranche, yields 1.25 percentage point above Treasuries, a separate person said.
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It’s common for the biggest US banks to sell debt shortly after releasing quarterly results. But there were some questions this go-around after the primary market froze earlier this month in the wake of an evolving global trade war.
Tuesday’s deals received orders 3.3 times the amount of bonds sold, according to Bloomberg’s Brian Smith, compared with 3.8 times on Monday.
“Clearly there’s appetite for sizable bank issuances,” said Peter Simon, an analyst who covers the sector at research firm CreditSights. “We don’t see much evidence that the market is overly concerned with these banks, which makes sense given their results have been solid this quarter.”
Goldman reported record revenue in the first quarter, while Wells Fargo’s report pointed to soft loan demand amid the ongoing tariff uncertainty. Wells’ net interest income, the difference between what it makes from lending and pays for deposits, fell short of analysts’ projections. Still, non-interest expenses were better than forecast as Chief Executive Officer Charlie Scharf works to cut costs.
In the high-grade market, banks have underperformed in recent weeks, with TD Securities credit strategist Hans Mikkelsen writing that was likely due to expectations of new debt sales. The average bank bond spread widened 24 basis points this month through Monday, more than investment-grade notes overall while yields for the latter briefly hit 11-month highs last week.
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