Morgan Stanley, BofA sell $9b of new bonds

Bloomberg

Morgan Stanley and Bank of America Corp (BofA) were the first of the big six Wall Street banks to announce bond sales, combining to sell $9 billion of new bonds, as the market gears up for the usual deluge of debt from the US lenders
following their respective earnings reports.
Morgan Stanley sold $6 billion of new debt in three parts. The longest portion of the sale, a 15-year note, yields 2.43 percentage points over Treasuries, after initial pricing talks expected 2.7 percentage points.
Bank of America sold a $3 billion security, according to a person familiar with the matter. The four-year fixed-to-floating rate note yields 1.2 percentage points above Treasuries, after initial pricing talks of 1.45 percentage points said the person, who asked not to be identified as the details are private.
Each bank dropped four-year floating-rate tranches from their deals. Both will use proceeds from the sale for general corporate purposes.
Morgan Stanley’s net income tumbled almost 40% from a year earlier on lower revenue, as non-interest expenses came in higher than expected and trading missed estimates. But overall results at the New York-based bank were better than analysts expected.
Bank of America reported earnings on Friday, along with Wells Fargo & Co., Citigroup Inc., and JPMorgan Chase & Co. Goldman Sachs Group Inc. and Morgan Stanley each
announced results.
The Charlotte-based bank’s traders beat analysts’ estimates as they reaped the benefits of dramatic market swings, and lending income rose along with interest rates while falling short of expectations
One key area of strength reported by Bank of America was its fixed income, commodities and currencies trading segment, where revenue posted a 49% gain.
Executives touted investments in that business, which received a boost from higher rates, inflation and volatility spurred by economic pressures and geopolitical uncertainty.
Now that all six banks have reported earnings, their issuance is expected to be the bulk of the week’s new investment-grade deals. Syndicate desks indicate they could sell a combined $20 billion to $25 billion of debt across multiple currencies in January, a potential 15% drop versus the prior year, according to Bloomberg Intelligence analyst Arnold Kakuda. Bank debt issuance is expected to fall to a “more normalized pre-pandemic pace,” the analyst wrote in a note dated January 10.