Morgan Stanley Sells $8 Billion High-Grade Bonds

Core Viewpoint - Morgan Stanley is planning to raise approximately $7.5 billion in investment-grade bonds, marking the third major bond issuance by a Wall Street firm this week following the release of third-quarter earnings [1]. Group 1: Bond Offering Details - The bond offering consists of four parts, with the longest note being an 11-year bond that may yield 0.9 percentage points above Treasuries, which is a quarter-point lower than the initial price guidance [2]. - Proceeds from the bond sale will be utilized for general corporate purposes [2]. - A six-year floating-rate note that was initially part of the offering was dropped during syndication, similar to a floating tranche that was scrapped in a previous bond sale in April [3]. Group 2: Market Context - The pending bond sale by Morgan Stanley follows a $10 billion bond offering from Goldman Sachs and a $5 billion deal from JPMorgan Chase, occurring after the six largest US banks reported generally strong third-quarter results [4]. - The average yield on US investment-grade bonds has decreased to a one-year low of 4.69%, with spreads remaining near historic lows below 0.8 percentage points, making funding costs attractive for higher-rated borrowers [5]. - Notably, Fridays typically see low activity in high-grade note sales, with only 1% of this year's supply being issued on that day, making Morgan Stanley's deal the only one in the market on that Friday [5].