Citigroup Inc. is making a bold move by raising $5 billion in debt through a bond offering, marking its first venture into this area in four years. The offering, which has already been launched, is set to settle as early as Wednesday.
New Opportunities for Citibank NA
In a strategic move, Citibank NA, the operating unit of Citigroup, is entering the investment-grade bond market in three parts. The largest part of this offering is a $2.5 billion five-year, fixed-rate bond priced at 118 basis points over Treasurys.
Following in the Footsteps of Competitors
Citigroup's decision to issue bank-level bonds comes after major financial institutions such as Wells Fargo & Co., Morgan Stanley, and Bank of America Corp. have already done the same this year. With clients pulling out deposits accumulated during the COVID-19 pandemic, these firms are raising cash to adapt to changing market dynamics.
Positive Market Response
As a result of this news, Citigroup's stock saw a modest increase of 0.5% in premarket trading.
It remains to be seen how this move will impact Citigroup's position in the market, but it certainly represents a significant development for the company.