(Bloomberg) --Truist Financial and Fifth Third Bancorp tapped the U.S. investment-grade market on Monday, growing the pile of domestic bank debt that has been issued so far this month to $40 billion, as Wall Street firms emerge from fourth-quarter earnings.
Truist sold $3.5 billion of bonds in two parts, according to a person with knowledge of the matter. The longest portion of the offering, an 11-year fixed-to-floating rate security, yields 162 basis points above comparable Treasuries after initial price discussions of around 190 basis points, said the person, who asked not to be identified as the details are private.
Fifth Third was also in the market with a $1 billion eight-year security that yields 155 basis points above comparable Treasuries, after initial price discussions of around 187.5 basis points, according to a person with knowledge of the matter.
Truist reported what analysts described as a "noisy" and "super-messy" quarter amid a $6.1 billion goodwill impairment, while saying its underlying results were solid and that its guidance for revenue in 2024 appears better than expected. Meanwhile, Fifth Third reported earnings Friday that
Truist declined to comment while Fifth Third didn't reply to a request for comment.
Financial institutions, led by the biggest U.S. banks and regional lenders, have dominated high-grade issuance, making up over 60% of the $149 billion that has priced so far this month. JPMorgan Chase, Wells Fargo, Morgan Stanley and Bank of America raised a total of $28 billion last week. Regional banks, including PNC Financial Services , U.S. Bancorp and Citizens Financial Group have been active too.
Demand for debt has been so insatiable that the so-called new-issue concession — the extra yield on a new bond compared to the seller's existing securities — has been minimal to negative on recent investment-grade sales. That demand could help keep issuance activity going strong.
Syndicate desks are projecting more than $25 billion of new investment-grade bonds this week. Issuance could break the roughly $175 billion January record set in 2017, with banks propelling much of the activity as they face looming maturities and prospects of tougher capital rules.
Citigroup and Goldman Sachs Group, two of the six biggest Wall Street banks, haven't yet sold new bonds following earnings reports.
