Citigroup returns to Canada's bond market with a $1bn offering, marking its first large issuance since 2015
Citigroup Inc. is entering the Canadian-dollar bond market with a significant debt offering, its first in nearly a decade, following a period of earnings reports by US banks seeking to diversify their funding sources.
According to BNN Bloomberg, Citigroup is marketing $1bn in fixed-to-floating rate notes. These notes are set to mature in four years and include a callable option after three years.
The expected yield for this offering is 1.07 percentage points above Canadian benchmarks, initially discussed in the range of 1.07-1.10 percentage points.
The information was provided by sources familiar with the matter, who preferred to remain anonymous as they are not authorized to speak publicly. Initially, the offering included a floating-rate tranche, which was later removed.
A Citigroup spokesperson has not responded to requests for comment on the matter.
This transaction marks Citigroup’s first large-scale public offering in Canada since a $600m deal in 2015, which carries a 4.09 percent coupon and is due to mature next year. Although Citigroup has issued loonie-denominated debt in smaller amounts in 2021 and 2023, this deal is significant in its scale.
The announcement comes on the heels of Citigroup's better-than-expected earnings reported over a week ago. This offering follows closely after Wells Fargo & Co.’s $1.25bn maple bond offering, which attracted double the orders of its size last week.
These developments occur as many Canadian companies, including banks, are increasingly opting to issue debt overseas, often to secure better pricing. This trend has led to a reduced supply of such offerings in Canada, leaving investors eager for new opportunities to invest their capital.
