Goldman Sachs Group Inc., Bank of America Corp. and regional lender Huntington Bancshares Inc. are marketing fresh debt in the US high-grade market Monday, as companies look to sell bonds before the cyclical summer slowdown that typically kicks in toward the end of August.
(Bloomberg) — Goldman Sachs Group Inc., Bank of America Corp. and regional lender Huntington Bancshares Inc. are marketing fresh debt in the US high-grade market Monday, as companies look to sell bonds before the cyclical summer slowdown that typically kicks in toward the end of August.
Bank of America is looking to sell senior unsecured notes in a four-part deal, which is expected to price Monday, according to a person familiar with the matter. The longest-dated note, a three-year fixed-rate security, may yield 1.1 percentage points over Treasuries, said the person, who asked not to be identified as the details are private.
Goldman Sachs is marketing a benchmark-sized deal of fixed-rate perpetual notes, also expected to price Monday, according to a person familiar with the matter. The offering may yield in the area of 7.875%. The bank plans to use the proceeds to redeem preferred stock.
In raising fresh debt, the lenders join a slew of peers like Morgan Stanley, JPMorgan Chase & Co. and Wells Fargo & Co., which all issued bonds soon after emerging from earnings blackout periods in July.
Meanwhile, Columbus, Ohio-based Huntington is looking to sell a benchmark-sized deal of senior unsecured notes, anticipated to price Monday, according to a person familiar with the transaction. The six-year fixed-to-floating rate notes may yield 2.15 percentage points over Treasuries, the person said, asking not to be identified as the details are private. Proceeds from the sale are earmarked for general corporate purposes.
Huntington’s debt sale comes a week after Moody’s Investors Service lowered its ratings for 10 small and midsize lenders by one notch each, citing higher funding costs, possible regulatory capital weaknesses and growing risks related to commercial real estate amid weakening demand for office space. While Huntington was not one of the banks that was downgraded, the firm had its outlook changed to “negative” from “stable” by Moody’s.
After the tumult that swept across the broader banking sector since March, the nation’s biggest banks and regional lenders are facing new rules that would require firms to set aside more capital to protect them from insolvency. Such regulations will likely lead to more issuance from regional banks over time as lenders look to raise capital.
Entergy Arkansas, Otis Worldwide and Fiserv Inc. are also in the market Monday.
A representative for Goldman Sachs declined to comment. Representatives for Bank of America, Huntington, Entergy, Otis and Fiserv did not immediately reply to requests for comment.
–With assistance from Brian Smith and Josyana Joshua.
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