Goldman Markets First U.S. Bank Bond Sale in Australia Since May

Goldman Sachs Group Inc. is marketing bonds in Australia, the first such offering by a U.S. bank in 2 1/2 months.

The Wall Street lender that generates most of its revenue from trading is offering five-year Australian dollar-denominated notes at a yield of about 170 basis points more than swaps, spokeswoman Hayley Morris said. Goldman Sachs last sold similar debt in November, when it priced A$600 million ($557 million) of bonds with the same tenor at a 195 basis-point spread, data compiled by Bloomberg show.

Bank of America Corp. was the most recent U.S. lender to issue bonds in Australia, selling A$850 million of 2018 notes on May 14, according to data compiled by Bloomberg. Following record debt sales in May, issuance in the South Pacific nation dropped to the least since December 2011 last month as concern the Federal Reserve will reduce stimulus roiled global markets.

The average spread for financial-company bonds in Australia spiked to as high as 130 basis points more than swaps on July 2 before narrowing to 115 on July 26, Bank of America Merrill Lynch index data show. While the premium is nearing its level before Fed Chairman Ben S. Bernanke spoke about tapering at his June 19 news conference, issuance has remained muted and July is the second-slowest month this year.

Goldman Sachs holds the seventh-highest credit rating at Moody’s Investors Service and Standard & Poor’s. Bank of America carries the same A- ranking as Goldman Sachs at S&P and is graded two levels lower at Moody’s. The 5-1/4 year paper it sold in May was priced at a spread of 190 basis points.

The current Goldman Sachs transaction is being managed by the lender itself, Australia & New Zealand Banking Group Ltd., National Australia Bank Ltd. and Royal Bank of Canada, according to a person familiar with the matter, who asked not to be identified because the terms aren’t set. The notes are expected to price tomorrow, the person said.

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