JPMorgan Raises 1.5 Billion Euros From Sale of 10-Year Bonds
JPMorgan Chase & Co. (JPM) raised 1.5 billion euros ($1.85 billion) from its first bond sale in the currency for more than a year as investors seek to diversify risk by purchasing non-euro region assets.
The largest U.S. bank priced the 10-year bonds to yield 100 basis points more than the mid-swaps rate, according to a person familiar with the deal. The notes were initially marketed with a 110 basis-point spread.
The New York-based lender followed Wells Fargo & Co. and Procter & Gamble Co. in tapping European investors seeking haven assets. JPMorgan last sold 1 billion euros of 3.75 percent bonds on June 2011, according to data compiled by Bloomberg.
“It offers a way to increase exposure to non-European risk, like the recent Wells Fargo deal,” said Gregory Turnbull Schwartz, an Edinburgh-based fund manager at Kames Capital, which manages about 50 billion pounds ($78.5 billion) of assets.
The cost to swap euros for dollars is near the lowest in three months, according to the 10-year cross-currency basis swap, making it attractive for issuers to sell bonds in the common currency. The swap was 32 basis points below the euro interbank offered rate, or Euribor, at 12:24 p.m. in London, approaching the lowest since May 11.
JPMorgan arranged the deal. Kate Haywood, a London- based spokeswoman for the bank, declined to comment.
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