Bank of America, Goldman Sachs and JPMorgan Chase had massive bond sales

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Three major banks took advantage of a recent dip in government bond yields to sell bonds following their earnings reports this week.

That extra money could help them pass the Federal Reserve’s stress tests, allowing them to raise dividends and buy back shares later this year.

bank of America

(ticker: BAC) sold $ 15 billion in bonds over six tranches, the largest sale ever for a bank, according to Bloomberg. On Thursday,

JPMorgan Chase & Co

(JPM) sold $ 13 billion in bonds across five tranches, the largest ever recorded until Bank of America’s offering on Friday.

Goldman Sachs

(GS) sold $ 6 billion worth of bonds in two tranches. Goldman’s bonds had a fixed interest rate and the others had a combination of fixed and floating interest (and fixed to floating) debt.

All three banks came to the market after exceeding analysts’ earnings expectations this week. Investors were bullish on the outlook for Wall Street banks this year, even after the reintroduction of capital requirements for deposits and treasury bills that the Fed temporarily eased last year. If the banks pass the next round of Fed stress tests, the central bank will lift the dividends and buyback limits originally imposed during last year’s Covid-19 crisis.

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In comments on the offering from JPMorgan and Goldman Sachs, CreditSights analysts said they expect those banks to be among the largest issuers in the market this year.

Businesses in general have had easy access to capital markets this year; for example, the junk bond market has seen its fastest issuance ever.

Write to Alexandra Scaggs at [email protected]