BofA Extends the Bank Issuance Frenzy With $9 Billion Bond Sale

(Bloomberg) -- Bank of America Corp. sold $9 billion of bonds Tuesday, joining Wall Street peers in a flood of new deals at the start of 2022 to beat an expected rise in interest rates.

The lender sold bonds in five parts, according to a person familiar with the matter. The longest portion, an 11-year fixed-to-floating-rate security, yields 117 basis points above Treasuries, said the person, who asked not to be identified as the details are private. Initial price discussions were in the 135 basis points range. Proceeds from the self-led sale are earmarked for general corporate purposes, the person said.

Read more: Banks Take the Bond Money and Run in $80 Billion Spree

BofA's move follows a frenzy of bank offerings in January, including Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase & Co. and Citigroup Inc. Last month was the busiest January for issuance from the big six U.S. banks since 2018, BofA strategists led by Yuri Seliger wrote Monday. 

Financial companies have been leading a rush to lock in still-attractive borrowing costs before the Federal Reserve begins to raise interest rates in March. Proceeds are being used for everything from appeasing regulatory concerns about their financial strength to expanding prime brokerages, which provide services to hedge funds.

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