(Bloomberg) — Citigroup Inc. is selling a large offering of debt securities into the Canadian dollar bond market for the first time in nearly a decade, as U.S. banks look to diversify their funding after reporting earnings.
The bank sells C$1 billion ($730 million) worth of fixed- and floating-rate notes that mature in four years and can be called after three years, according to people with knowledge of the matter. The deal is expected to fetch 1.07 percentage points above Canadian benchmarks, after initial discussions in the range of 1.07 to 1.10 percentage points, said the sources, who asked not to be identified because they are not allowed to talk about it. The initial offer included a variable rate tranche, which was abandoned.
A Citigroup spokesperson did not immediately respond to a request for comment.
The planned deal marks Citigroup’s first major IPO in Canada since 2015, according to data compiled by Bloomberg. This C$600 million transaction carries a coupon of 4.09% and matures next year. The bank sold dollar-denominated debt in small pieces in 2021 and 2023, according to data compiled by Bloomberg.
Monday’s deal comes after the bank reported better-than-expected earnings more than a week ago. It would be the second maple bond issuance from a major U.S. bank in the past week, following Wells Fargo & Co.’s C$1.25 billion offering that attracted orders twice more important.
Both deals came at a time when many Canadian companies, including banks, are going abroad to sell debt, often at better prices. This has led to a slowdown in supply and a thirst for investors looking to deploy liquidity.
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