According to MarketAxess, First Republic’s 4.375% coupon notes due August 2046 were quoted at a 340 basis point premium to risk-free Treasurys, rising by roughly 122 basis points.
It translates into a yield of around 7.2% and a price of roughly 68 cents on the dollar, down from a previous yield of 8.2% and price of roughly 60 cents, indicating that investors are asking for less money in exchange for taking on First Republic’s long-term risk. But generally speaking, distressed bonds are those that are valued at less than 70 cents on the dollar.
The nation’s major banks, including JPMorgan Chase & Co., JPM Citigroup Inc., Bank of America Corp., and Wells Fargo & Co., WFC, announced intentions to support First Republic with $30 billion of additional capital on Thursday in the afternoon.