Morgan Stanley, one of the largest investment banks on Wall Street, placed an 11-year bond that was more profitable than Treasury debt.
Morgan Stanleyone of the leading investment banks in Wall Streetset the price of a issuance of investment grade bonds for US$8,000 million on Friday, marking the third operation of this type carried out by a large firm in the sector in the week after the presentation of third quarter results.
The placement, structured in four sections, included a 11 year bondthe longest term, which offered a yield of 0.9 percentage points above Treasury bonds.
That margin was a quarter of a point lower than the initial reference level, according to a source close to the operation who requested anonymity because he was not authorized to speak publicly, as Bloomberg reported.
Morgan Stanley continues to issue debt on Wall Street
During the syndication, a floating rate tranche with a six-year maturity that had been initially included was eliminated. The entity had already done the same in April, when it withdrew a floating tranche of an issue originally in five parts that also ended up raising US$8 billion, equaling the figure of its January placement. So far this year, Morgan Stanley completed three issues in four tranches for that same amount, all for general purposes.
Morgan Stanley.jpg
The operation added to the recent activity in the primary market: Goldman Sachs raised US$10 billion last Tuesday and JP Morgan another US$5 billion on Wednesday.
The three transactions were launched after the six largest US banks reported strong quarterly results. However, the optimism was partially dampened on Thursday, when two regional entities reported having suffered fraud related to loans backed by funds that invest in distressed commercial mortgages.
Unusual operation
The average yield on investment-grade U.S. corporate bonds fell Thursday to a annual minimum of 4.69%while spreads remained near historical lows (below 0.8 percentage points), keeping financing costs low for issuers with higher credit quality.
Wall Street analysts noted that the choice of Friday as the placement date was unusual: historically, only about 1% of high-quality bond issues are completed that day. In fact, Morgan Stanley’s deal was the only issuance in the primary market of US blue-chip corporate bonds that Friday.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
