BLBG: JPMorgan Plans Five-Year Bond Sale As Relative Bank Yields Drop
JPMorgan Chase & Co. (JPM) plans to sell five-year debt as the extra yield investors demand to own bank bonds instead of government obligations narrows to the lowest level in a year.
The largest U.S. lender by assets is selling notes in a benchmark offering, typically at least $500 million, that may be rated A2 by Moody’s Investors Service, its sixth-highest grade, according to a person familiar with the sale who asked not to be identified because terms aren’t set. The spread on corporate bank debt fell to 233 basis points Aug. 10, the narrowest since August 2011, according to Bank of America Merrill Lynch index data.
JPMorgan’s $3 billion of 6 percent notes maturing in October 2017 traded at 115.4 cents on the dollar to yield 2.76 percent Aug. 10, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Moody’s downgraded JPMorgan two levels to A2 in June.
To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net
To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net
