(Bloomberg) — Goldman Sachs Group Inc. and Morgan Stanley sold $11.3 billion combined in investment-grade bonds Wednesday after both banks posted earnings that surpassed analyst expectations.
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Both sales came a day after rival JPMorgan Chase & Co. issued debt amid strong investor demand, after also reporting better-than-expected third-quarter results. Goldman sold $5.5 billion of bonds in two parts, according to a person familiar with the matter, asking not to be identified discussing private details.
The longer portion of Goldman’s offering, an 11-year fixed-to-floating rate security, yields one percentage point above Treasuries, the person added, after price talk between 1.25 to 1.3 percentage point.
A spokesperson for Goldman declined to comment.
Goldman’s sale comes a day after announcing its profit jumped 45% in the third quarter, as its stock traders recorded their best quarter in more than three years while its dealmakers pocketed fees that beat estimates across every key business line.
Meanwhile, Morgan Stanley sold $5.75 billion of debt in three parts on Wednesday, according to a separate person familiar, also asking not to be identified. The longest portion of the offering — a six-year fixed-to-floating rate security — yields 0.82 percentage point above Treasuries, after earlier discussions in the 1 percentage point area, the person said.
A spokesperson for Morgan Stanley also declined to comment.
Morgan Stanley’s bond sale comes after the bank on Wednesday morning reported a 32% profit surge for the third quarter. Its wealth unit and fixed-income businesses exceeded expectations while revenue from trading increased by 13%.
The six biggest banks on Wall Street were expected to take advantage of robust investor appetite and tight spreads to sell as much as $24 billion of bonds after posting results. JPMorgan’s sale on Tuesday drew about $34 billion in orders, allowing the Wall Street giant to increase the final deal size to $8 billion from earlier discussions of between $6 billion and $7 billion. The bank reported earnings on Friday.
Both Goldman and Morgan Stanley acted as sole bookrunners for their respective offerings, according to the people familiar.
–With assistance from Michael B. Marois.
(Updates to show that both deals have priced.)
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