(Bloomberg) -- Goldman Sachs Group Inc. is tapping the US investment-grade market on Wednesday, joining rivals JPMorgan Chase & Co. and Wells Fargo & Co. in selling bonds post-earnings even as borrowing costs rise.
The lender is selling fixed-to-floating rate notes in as many as two parts, according to a person with knowledge of the matter. The longest portion of the offering, an 11-year security that is callable after 10 years, may yield 1.95 to 2 percentage points above Treasuries, said the person, who asked not to be identified as the details are private.
Goldman posted a second straight quarter of real estate writedowns and a continued dealmaking slump on Tuesday, leaving the firm's profitability at about half the level it's targeting. Trading revenue that surpassed analysts' estimates helped soften the blow.
Big banks, which were expected to stay on the sidelines as they're well-funded for the short term and borrowing costs are high, are flooding the market with new deals. Wells Fargo and JPMorgan collectively raised $13.25 billion on Monday while PNC Financial Services Group Inc. led the way for regional bank issuance post-earnings, pricing $3.5 billion in a two-part deal on Tuesday. The slew of issuance may be a sign that banks expect it to become more expensive to borrow in the future.
The average spread on a financial institution bond was at 146 basis points as of Tuesday, 22 basis points wider than the spread for the broader high-grade bond index, according to data compiled by Bloomberg.
A spokesperson for Goldman Sachs didn't immediately reply to a request for comment.
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