The Banking and Strategy Initiative

Chillin' out till it needs to be funded

JP Morgan growing 'debt wings'

JP Morgan Chase tower

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As it starts support its World no.1 Investment Banking team in more direct loan syndication in all deals, it is obvious that JP Morgan’s share in bonds at 28% and debt another 27% is going to go a long way  in keeping it on top even as it earns honors badges for stealing money to fill its collateral tabs from its clients in broking and securities business.

Its own issue of debt of $1.5 bln that came at low 5.4% rates on Monday for 30 years may still give it reason to continue hoarding overnight debt as Capital and continue its run as the only G20 sponsored institution paying a 2.5% surcharge but then being Dealbook #1  is not an easy hat/or shoes to wear or keep.

On the client side, it has come out in favor of the long crumbling muni market taking a competitive 2.5% for  a basket of munis for Massachusetts from 2015 to 2027. Apart from keeping the lead in the $73 bln Fee Income market across all classes, this gave it #1 in the Muni market with a $400 mln worth of bonds, while the BofA ML bid was a 10% higher 2.73% for the basket of bonds

JP Morgan will sell this book in the market after winning it in competitive bidding, while 4 in 5 bonds a re sold to the best proposal based on negotiations with the client districts/counties.

The state of the muni market remains delicate

A recent restructuring of Jeffersen county happened through bankruptcy court as over 171 municipal districts are near bankruptcy, hidden behind frontrunning of public worries on mortgages and CRE  in the media. Jeffersen county has $3.14 bln bonds for its sewer systems(thedeal.com), while many others unable to pay for new stadiums or roads and even machinery had to cut down on expenses on education and health for their county as federal funding was withdrawn.

 

 

English: Damage to JP Morgan Chase, Houston, T...

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This entry was posted on December 22, 2011 by in Banking, US and tagged , , , , , , , .

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