(Bloomberg) -- Citibank NA is tapping the investment-grade bond market Tuesday with its first bank-level debt offering in four years as deposits recede from their pandemic-era highs.
The New York-based bank, the operating company of Citigroup Inc. which offers saving accounts, credit cards and mortgages, is selling $5 billion of fixed- and floating-rate notes in three parts, according to a person familiar with the matter. The longest portion, a $2.5 billion five-year fixed-rate tranche, will yield 1.18 percentage point over Treasuries after earlier discussions for about 1.4 percentage point, said the person, who asked not to be identified as the details are private.
Citigroup is managing the bond sale, which is expected to price later Tuesday. A representative for the bank declined to comment.
Bank operating company debt footprints shrank significantly following massive inflows of deposits during the pandemic, according to a Tuesday note by Jesse Rosenthal, head of US financials at CreditSights Inc.
“As that Covid-era funding mix shifts back toward normal, driven by declining deposits on the back of monetary policy, we would expect incremental debt funding at the OpCo level,” he said. Citibank’s transaction follows others by Bank of America Corp., Morgan Stanley and Wells Fargo & Co., which sold bank-level bonds in recent months.
Citibank NA was last in the market in May 2019, according to data compiled by Bloomberg, when the company raised $3 billion.
The new deal is part of a revival of corporate bond sales that saw multiple companies stand down during some trading sessions following the Federal Reserve’s hawkish pause on Wednesday. Citibank joins Canadian Imperial Bank of Commerce, Australia & New Zealand Banking Group Ltd., and Credit Agricole SA so far this week.
CIBC, ANZ and Credit Agricole didn’t respond to requests for comment.
--With assistance from Michael Gambale and Andrew Kostic.
(Updates to show that deal has launched.)
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