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Stock Market News – Banks In Rush To Borrow Money

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Banks in a rush to borrow money. Is it a good thing or a bad thing? It can go either way, they may need the money to fight the recent law suits, or they may need the money to try and spur growth. Either way we all know they are not lending money. Read full story below.


Stock Market News – Banks In Rush To Borrow Money

 

Unbias Stock Market News -

Banks and financial institutions are leading the pack of global borrowers that have rushed to the US debt markets at the start of the year.

Global corporations began 2013 with a wave of issuance that pushed total bond sales in the US over the $40bn mark in less than a week. But no group of borrowers has been more aggressive than banks and financial institutions.

Citigroup, Allstate and MetLife, among others, were joined by the UK’s Standard Chartered and Italy’s Intesa Sanpaolo, sending dollar-denominated sales of bank debt to $14.3bn so far this year, according to Dealogic. In a single blockbuster sale, Bank of America offered $6bn in three parts on Tuesday. That was the largest bond sale so far in 2013.

Banks are rushing to squeeze in as many sales as possible ahead of the so-called quiet period, which precedes the release of their quarterly earnings reports, analysts said. Wells Fargo kicks off the US bank results season on Friday, with JPMorgan Chase, Citigroup, Morgan Stanleyand Goldman Sachs coming next week.

“Banks tend to come to markets earlier in the year, but they are certainly being more aggressive,” said Jason Brady, portfolio manager at Thornburg Investment Management. “It’s a sign they are growing more comfortable with their balance sheets and in a position to take more debt.”

A recent rise in Treasury yields may also be contributing to the banks’ rush to lock in new funding sooner rather than later. The yield on the 10-year note moved close to 2 per cent from 1.7 per cent in a matter of days, before paring some of its advance.

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