Group Inc. sold $10 billion of investment-grade bonds on Tuesday, its largest issuance in nearly four years, after posting record third-quarter revenue, becoming the first of the six biggest US banks to raise debt this earnings cycle.
The five-part deal’s longest portion, an 11-year fixed-to-floating rate note, yields 0.92 percentage point more than Treasuries, according to a person with knowledge of the matter who asked not to be identified as the details are private. Initial price talk was a spread of about 1.15 percentage points, the person added.
The bond sale was Goldman’s largest since January 2022, when the company raised $12 billion in a six-part deal.
A rush of sizable mergers and acquisitions is lifting Wall Street dealmakers after trade uncertainty had stifled activity. Goldman posted $2.66 billion in third-quarter investment banking fees, beating the $2.18 billion expected by analysts. Overall revenue was $15.18 billion, third-most for any quarter at the company.
Dealers surveyed by Bloomberg News had expected about $20 billion of issuance by members of the six big Wall Street banks this week, following their release of quarterly results. But JPMorgan Chase & Co. strategists last week projected just $15 billion overall combined for the six firms this month, down from the $20 billion raised after second-quarter results.
“Skepticism remains among investors regarding the issuance cadence given how tight spreads are and the lack of guidance from management teams,” they wrote in a note. “That said, we think the direction of issuance is lower.”
The bonds are expected to be rated A2 by Moody’s Ratings and BBB+ by S&P Global Ratings, said the person.
Issuer Profile
Debt distribution: GS US Equity DDIS
Capital structure: GS US Equity CAST
Related securities: GS US Equity RELS
Ratings history: GS US Equity CRPR
This story was produced with the assistance of Bloomberg Automation
–With assistance from Victor Swezey.
(Updates with deal pricing.)
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