Goldman Sachs Group Inc., tapping demand that has driven borrowing costs near their lowest in almost five years, issued $2 billion of bonds at a yield premium 44% less than the last time it sold similar-maturity debt.

The 5.375%, 10-year notes were priced to yield 5.493%, or 190 basis points more than Treasuries, according to data compiled by Bloomberg. The New York banking company paid a spread of 337.5 basis points, or 3.375 percentage points, in its last 10-year sale, in May, the data showed.

Goldman Sachs, the most profitable securities firm in Wall Street history, came to market as concern that Greece would default faded and the cost to protect against nonpayment of U.S. corporate debt fell to its lowest in more than five weeks. U.S. bank costs have declined to 4.861%, less than half their level in March 2009, according to a Bank of America Merrill Lynch index.

"The sword of Damocles hanging over the corporate bond market is receding, at least temporarily," said Scott MacDonald, the head of credit and economics research at Aladdin Capital Holdings LLC in Stamford, Conn., which oversees $11.9 billion. This is making it "more favorable to sell debt," he said.

Goldman Sachs sold notes as U.S. banks seek to replace $309 billion of government-guaranteed debt with longer-dated maturities. It had $20.8 billion of senior unsecured debt guaranteed by the Federal Deposit Insurance Corp. in December, according to a filing this week with the Securities and Exchange Commission. Goldman was the first banking company to use the Temporary Liquidity Guarantee Program, which provided access to credit markets after the collapse of Lehman Brothers Holdings Inc. in September 2008.

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