Bank of America went out on a Friday, initially targeting at least $6 billion as marketing began. The sale came in four slices maturing from three to 11 years, with the longest piece sized at $2.75 billion. A person with knowledge of the deal said that tranche's spread moved in by roughly a quarter percentage point to land 0.95 percentage point above Treasuries, and requested anonymity because they are not cleared to comment publicly.
This was the bank's first trip to the debt market since April, and it made Bank of America the third big Wall Street player to print bonds during the holiday-shortened week. Year to date, the bank has now raised $25 billion, pushing it ahead of Citigroup and Wells Fargo. Both of those peers priced notes last month.
The backdrop was anything but calm. Treasury yields swung sharply, and credit risk for blue-chip borrowers rose following hotter-than-expected inflation data and growing worries about how long massive spending on artificial-intelligence infrastructure can be sustained. Even so, $28.5 billion of high-grade paper priced this week, close to dealer expectations.
There had been only four Friday sales all year prior to this - together raising just $2.7 billion - underscoring how unusual the timing was. Earlier in the week, Bank of America's shares slid after it reported both equity and fixed-income trading fell short of estimates and it disclosed a $1.2 billion charge for fines tied to money laundering and sanctions violations.
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Bank of America, JPMorgan Chase and Morgan Stanley together issued $18 billion this week. The Big Six - rounded out by Goldman Sachs, Citigroup and Wells Fargo - often fund after posting quarterly results, and all six reported this week, sending a mixed read on the group overall. Barclays expects the six to sell about $41 billion of investment-grade notes this quarter, roughly 30% above the average for the same quarter since 2015.
Bank of America was the only Big Six bank that did not sell bonds in the third quarter. By stepping in now, it added to a week when issuance nearly matched forecasts despite the volatility.
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