Corporate bond sales in the U.S. from financial institutions are on track for their weakest January since 2012, despite more than $10bn in deals on Friday from Morgan Stanley, Wells Fargo and Royal Bank of Canada.
Bloomberg News reports that Morgan Stanley, which this week reported profit and revenue that exceeded analysts’ estimates, sold $5.5bn of bonds in a three-part offering that is the biggest deal from a financial institution so far this month, according to data compiled by Bloomberg. In addition, Wells Fargo issued $3.5bn in debt, while Royal Bank of Canada raised $1.5bn.
“Banks really like to come out en masse in January,” said Arnold Kakuda, a bank credit research analyst at Bloomberg Intelligence. “But unfortunately the beginning of this year has gotten off to a very volatile start. Uncharacteristically, you’ve had this Friday be very busy because it’s an opening and we’ve had some stability.”
After a week of turmoil in financial markets, a global rally in equities and surging oil prices have somewhat eased investors’ concerns and encouraged issuers to take advantage of any signs of strength.
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