Banks and financial institutions are leading the pack of global borrowers that have rushed to the U.S. debt markets at the start of the year.
Global corporations began 2013 with a wave of issuance that pushed total bond sales in the U.S. over the $40 billion 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 U.K.'s Standard Chartered and Italy's Intesa Sanpaolo, sending dollar-denominated sales of bank debt to $14.3 billion so far this year, according to Dealogic. In a single blockbuster sale, Bank of America offered $6 billion 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 Stanley, and 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 percent from 1.7 percent in a matter of days, before paring some of its advance.
"Any jump in rates tends to kick borrowers into action," Mr. Brady said.
Bank sales have also dominated the issuance calendar in Europe. Northern European issuers such as Deutsche Bank, HSBC France, BNP Paribas, and Societe Generale have all tapped the euro market in the past few days, but much of the focus has been on higher-yielding assets from the euro zone periphery.
BBVA, Spain's second-largest bank by assets, reopened the region's bond markets last week with a 1.5 billion euro deal. But there have since been sales from Portuguese, Italian and other Spanish lenders, including Banco Espirito Santo, UniCredit, Caixabank and Banco Popular.
More From The Financial Times
"Investors would prefer higher beta issuance just to get some decent yield in this low-rate environment," said Suki Mann, head of credit strategy at SG.
European banks have also taken advantage of huge demand for dollar transactions. The $3.5 billion Yankee offering from Italy's Intesa was almost six times subscribed.
For investors, bank debt is appealing as supply is still recovering from a sharp drop in issuance in 2010 and 2011. Barclays analysts expect total sales by investment grade financial institutions to reach $290 billion this year, in line with 2012.
Average yields on the securities are also higher. Yields on U.S. investment-grade financials stood at 2.55 percent this week, compared with 0.91 percent for US Treasurys, according to Barclays indices.