Goldman Sachs (GS.US) issues $10 billion investment-grade bonds, the largest in nearly four years

The Zhitong Finance App learned that Goldman Sachs (GS.US) issued $10 billion of investment-grade bonds on Tuesday, the largest bond issue in nearly four years. Earlier, the bank reported record third-quarter revenue, becoming the first bank among the six largest US banks to issue bonds during this earnings season.

The source revealed that the deal consists of five parts, the longest part being an 11-year fixed interest rate bond with a floating interest rate. The yield is 0.92 percentage points higher than US Treasury bonds. The initial price gap was approximately 1.15 percentage points.

The bond sale was Goldman Sachs's largest since January 2022, when the company raised $12 billion through a six-part deal.

Wall Street traders are being boosted by a series of large-scale mergers and acquisitions, where trade uncertainty previously dampened trading activity. Goldman Sachs's third-quarter investment bank fee revenue reached US$2.66 billion, exceeding analysts' expectations of US$2.18 billion. The company's overall revenue was US$15.18 billion, which is the company's third-highest revenue level in a single quarter.

According to traders, after the six major Wall Street banks announced their quarterly results, they had anticipated that these banks would issue about $20 billion in bonds this week. However, strategists at J.P. Morgan Chase predicted last week that the total issuance scale of these six banks this month would be only $15 billion, lower than the $20 billion raised after the announcement of the second-quarter results.

They wrote in a report: “Investors are still skeptical about the pace of issuance, given that interest spreads on bonds are very narrow and there is no guidance from management. However, we think the distribution scale will be reduced.”

The source said the bonds are expected to be rated A2 by Moody's Ratings Agency and BBB+ by S&P Global Ratings.