On Thursday, Reuters reported that financial behemoths JPMorgan Chase & Co.(JPM: 39.135 +0.695 +1.81%) and Bank of America Corp. (BAC: 15.85 +0.03 +0.19%) have issued fixed interest notes moving ahead with their debt restructuring strategies.Accordingly, JPMorgan reportedly vended off its five-year notes worth $1.25 billion. These notes carried an issue price of $99.795, to mature on Jun 24, 2015. These non-callable notes are projected to have a spread of 145 basis points over the US Treasuries, bearing a fixed interest rate of 3.4% and yield rate of 3.445%. Interest on the notes is payable semi-annually, in equal installments, commencing Dec 24, 2010.
JPMorgan’s notes carry a rating of “AA-”, “Aa3″ and “A+” from Fitch, Moody’s Investor Service of Moody’s Corp. (MCO: 21.135 +0.315 +1.51%) and Standards & Poor’s, respectively. Besides, the company increased the deal, when the company had re-launched the notes at $1.25 billion, higher than the prior plan of $1.0 billion. JPMorgan appointed itself as the sole book-runner for the deal. Prior to this, in March 2010, the company had sold off $2.75 billion of notes in order to raise funds.
Concurrently, Bank of America has reportedly raised $3 billion by issuing ten-year notes. These notes carried an issue price of $99.642, maturing on July 1, 2020. The non-callable note offering is projected to have a spread of 248 basis points over the U.S. Treasury, bearing a fixed interest rate of 5.625% and yield rate of 5.672%. Interest on the notes is payable semi-annually, in equal installments, commencing Jan 1, 2011, the settlement being slated for June 22, 2010.
Bank of America’s notes carry a rating of “A+”, “A2″ and “A” from Fitch, Moody’s Investor Service and Standards & Poor’s, respectively. Bank of America Merrill Lynch was the sole book-runner appointed for the launch of the notes. However, neither JPMorgan nor Bank of America disclosed the details of the proceeds utilization.
Of late, raising funds through note selling has become a common market phenomenon. In January 2010, MetLife Inc. (MET: 40.94 -0.09 -0.22%) sold note worth $2.5 billion in a two-part offering; prior to that, in Sep 2009, the company sold fixed-rate funding agreement-backed notes worth $1 billion, the proceeds of which were used for general corporate purposes.
Alongside, in March 2010, another significant peer Goldman Sachs Group Inc.(GS: 139.02 +1.70 +1.24%) issued an additional debt of $750, increasing the size of its senior note offering from the previously planned issue of $500 million. Besides, Hartford Financial Services Group Inc. (HIG: 25.0119 +0.0719 +0.29%) announced the pricing of its public offering of $1.1 billion in senior notes in order to acquire funds for the repayment of the $3.4 billion government bailout money and to prepay existing senior debt due in 2010 and 2011. Earlier this week,Western Union Co. (WU: 16.23 -0.04 -0.25%) raised $250 million of debt whilePrudential Financial Inc. (PRU: 58.89 -0.13 -0.22%) raised $1 billion of debt by selling senior notes.
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