The U.S. banks do everything possible to take advantage of low interest rates and rising confidence in myself to the strong performance of the sector this year. This is done through the issuance of significant amounts of new debt, thereby setting the basis for solid gains in the coming years, writes Financial Times. The high interest in fundraising in the U.S. is in sharp contrast with what is happening in Europe, where banks have problems in the issuance of bonds for government debt crisis in the euro area. In recent months, banks such as JPMorgan, US Bancorp, Goldman Sachs and Morgan Stanley easily sell bonds, which indicates a change in market sentiment and increased confidence in the sector. Less than two years after massive U.S. government intervention to rescue the financial system, U.S. banks managed to raise over 7 billion dollars by issuing debt within only one week. According to data from Dealogic, it is the largest amount of new bonds placed for one week since September last year. The US Bancorp has attracted $ 1 billion by selling five-year bonds at 2.45 percent interest. This is one of the lowest interest rates in history paid by Bank in bond, adds Financial Times.
With the low cost of borrowed stock banks managed to increase its profits as it improves their interest margin. Therefore, financial institutions are increasingly issuing new debt, just this month Goldman Sachs, Morgan Stanley and JPMorgan have gathered a $ 3 billion of new bonds. Cheapest loan capital allows banks to replace their old debts with new ones that are at a lower price. Thus, according to estimates of Moody’s, U.S. banks have managed to cover about 200 billion of total 372 billion dollars debt, maturing this year.

Tags: banks, emitting, emitting new debt, Goldman Sachs, high interest, JPMorgan, new debt, US Bancorp

This entry was posted on Friday, July 30th, 2010 at 12:46 pm and is filed under USA Finances. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.