A Wells Fargo & Co. bank branch in Dallas, Texas, U.S., on Monday, July 10, 2017. Wells Fargo & Co. is scheduled to release earnings figures on July 14. Photographer: Cooper Neill/Bloomberg -- Goldman Sachs Group Inc. and Wells Fargo & Co. are joining rival JPMorgan Chase & Co. in the tapping the U.S. investment-grade market after reporting second-quarter earnings.
Goldman’s trading unit powered a surge in earnings in the second quarter. Both fixed-income and equity traders outpaced analysts’ estimates, while a rebounding capital-markets business helped drive better-than-expected results across much of the company’s Wall Street operations. The new issue “looks like a net AT1 addition ,” CreditSights Inc. analysts Jesse Rosenthal and George Milonopoulos wrote in a Tuesday client note. This refers to the role of preferred shares as a source of Additional Tier 1 capital for US banks, played by contingent convertible bonds in other parts of the world.
JPMorgan credit analyst Kabir Caprihan expects $21 billion to $24 billion of issuance from the six biggest domestic banks, more than the 10-year July average of roughly $17 billion. Barclays analysts including Peter Troisi are calling for about $30 billion in the third quarter, with most of that expected this month.