Goldman Sachs Adds to Bank-Bond Spree With $12 Billion Offering

(Bloomberg) -- Goldman Sachs Group Inc. and Morgan Stanley are the latest Wall Street banks to tap the U.S. investment-grade bond market after reporting fourth-quarter results. 

Goldman Sachs sold $12 billion of bonds in six parts, according to a person familiar with the matter. The longest portion of the offering, a 21-year security, yields 1.2 percentage points above Treasuries, said the person, who asked not to be identified as the details are private. 

The Goldman Sachs sale is the third-largest ever from a U.S. bank, according to data compiled by Bloomberg. The four largest bond offerings have all occurred in the last two years.  

Morgan Stanley, meanwhile, sold $6 billion of debt in three parts, said a separate person. The longest portion, an 11-year note, yields 1.125% percentage points above Treasuries. 

Financial companies are leading a rush to lock in still-attractive borrowing costs before the Federal Reserve hikes interest rates, potentially adding to volatility and market uncertainty. Citigroup Inc. and JPMorgan Chase & Co. both sold new bonds Tuesday. 

Read more: Citi, JPMorgan Jump In First on Bank-Bond Binge Amid Rates Rout

Goldman Sachs shares tumbled Tuesday after the firm’s stock traders posted a lackluster fourth quarter, another sign that the frenzied market activity spurred by the pandemic is cooling. Revenue from the bank’s trading operation slid 7%, missing analysts’ estimates for a small gain. 

Morgan Stanley posted a surprise increase in equities-trading revenue in the fourth quarter, relying on a one-time gain, as its fixed-income business slumped. The company raised its long-term profitability target. 

Both banks were the sole bookrunners on their own sales, and will use proceeds for general corporate purposes, the people said. 

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