Bank of America Corp. (BAC), Citigroup Inc. (C), Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM), Morgan Stanley (MS) and Wells Fargo & Co. (WFC) have issued $314 billion in bonds in 2021 for the highest tally since 2008, according to Dealogic data cited Tuesday by The Wall Street Journal. That issuance includes multi-billion dollar issuances from Goldman Sachs, Morgan Stanley and Bank of America this month. Dealogic said financial institutions account for more than a third of U.S. investment grade debt in 2021. That's the biggest portion of the overall debt market from major banks "going back to the dawn of the megabank," the WSJ reported. The move has been propelled at least in part by debt ratio requirements set in the wake of the global financial crisis. As deposits at banks have grown, regulations dictate that banks keep a certain share of liabilities in long-term debt as a backstop against any potential jitters in debt markets. Tom Murphy, head of investment grade credit at Columbia Threadneedle Investments, told the WSJ that bank bonds trade at a higher yield relative to industrial company bonds with similar ratings. Murphy said the bank debt generates as much as 0.3% points in yield over industrials, for no more credit risk.
(END) Dow Jones Newswires
October 26, 2021 10:46 ET (14:46 GMT)
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