Goldman Sachs and US Bancorp supplied $8bn of paper, taking new issuance from financial institutions for January past $60bn.
“Risk-aversion has taken hold and FIG always bears the brunt of that,” said one syndicate source. “We had one bank stand down because of the volatility, but apart from that, everything is trading roughly around issue price.”
Those who had predicted a quiet week were wrong-footed as US Bancorp came out on Monday with a three-part $2.75bn offering of fixed and floating rates notes via Barclays, Goldman Sachs and US Bancorp.
US Bancorp, rated Aa3/AA- sold $1.3bn of 1.1% three year fixed rate notes at 35bp over US Treasuries following initial price thoughts over 45bp area. It also sold a $700m three year floater at 23bp over Libor, and a $750m 3.7% 10 year tranche flat to initial price thoughts at 95bp over US Treasuries.
On Tuesday, Goldman Sachs, rated Baa1/A-, followed with a $3bn self-led offering. The bank printed a $2.5bn five year at 112.5bp over with a coupon 2.625%. It also printed a $500m floater at 100bp over Libor.
Bank of New York Mellon, rated A1/A+, also came on Tuesday, pricing a $500m five year fixed rate note at 67bp over Treasuries with a coupon of 2.2%, and a $750m 10 year at 95bp over with a coupon of 3.65%.
There was a 23bp new issue concession on the 10 year, according to one source close to the deal. Bank of America Merrill Lynch, Citigroup and JP Morgan were joint bookrunners.
“Demand wasn’t huge and investors demanded a bit more in spread for all the trades this week,” said once source close to the deal.
Elsewhere, BB&T, rated A2/A-, sold $650m of 2.25% five year notes at 78bp over via Barclays, Deutsche Bank and BB&T. It also sold a $450m five year floater at 66bp over Libor.