BofA Raises $6.15 Billion in Bond Sale After Quadrupling Profits

Bank of America Corp., the lender that posted quarterly profit today that more than quadrupled, sold $6.15 billion of debt in a four-part issue.

The second-biggest U.S. lender issued $1.65 billion of five-year debt in two add-ons, including $1.25 billion of 2.6 percent bonds and $400 million of floating-rate notes, according to data compiled by Bloomberg. The floating piece was added after the deal was marketed earlier today, according to a person with knowledge of the transaction who asked not to be identified because terms aren’t set.

Sales of floating-rate securities have made up 18.7 percent of global corporate bond sales this year, up from 15.8 percent in all of 2013, Bloomberg data show. Investors are snapping up debt that offers protection against rising rates as economists predict yields on 10-year Treasuries will increase to 3.43 percent by year-end from 2.89 percent, according to the median estimate in a Bloomberg survey.

The bank also sold $2.5 billion of 4.125 percent, 10-year securities at 125 basis points more than similar-maturity Treasuries and $2 billion of 5 percent, 30-year bonds at a relative yield of 120 basis points, Bloomberg data show. The offering is expected to be rated Baa2 by Moody’s Investors Service.

The sale makes Bank of America the second-largest issuer of dollar-denominated debt this year, behind Electricite de France SA, which raised $6.2 billion this week, Bloomberg data show.

The lender’s fourth-quarter net income rose to $3.44 billion, or 29 cents a share, from $732 million, or 3 cents, a year earlier, according to a statement from the Charlotte, North Carolina-based bank. The average estimate of 27 analysts surveyed by Bloomberg was 27 cents, adjusted for one-time items. For the full year, profit more than doubled to $11.4 billion.

A basis point is 0.01 percentage point.

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