JPMorgan Chase & Co.'s $6.2 billion trading loss last year is little more than a fading memory for bondholders who awarded the lender its cheapest U.S. borrowing costs ever at a debt sale yesterday.
The largest U.S. bank by assets sold $6 billion of securities, including $2.75 billion of 10-year notes with an unprecedented 3.2 percent coupon, according to data compiled by Bloomberg. The extra yield investors demanded to hold those securities rather than government debt was 56 basis points tighter than where average comparable JPMorgan spreads traded before the scandal came to light in April.
JPMorgan's bond offering came a day after it reported a record profit for the third straight year even after posting the trading gaffe at the hands of an employee known as the London Whale. Aided by rising loan demand in a recovering economy, the New York-based bank boosted mortgage fees and related revenue almost threefold to $2.03 billion in the fourth quarter. The trading losses are close to being a "non-issue," Chief Executive Officer Jamie Dimon said.
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