Citigroup sells maple bonds in first sizable deal since 2015

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Citigroup Inc. sold a large debt offering in the Canadian-dollar bond market for the first time in nearly a decade as U.S. banks seek to diversify funding after reporting earnings.

The bank issued $1 billion of fixed-to-floating rate notes that mature in four years and can be called after three, according to people with knowledge of the matter. The deal yields 1.07 percentage point above Canadian benchmarks, after initial discussions in the 1.07-1.10 percentage point range, said the people, who asked not to be identified as they are not authorized to speak about it.

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The offer drew orders more than twice the size of the deal from 48 buyers, according to the people. A floating-rate component of the offering was dropped prior to pricing.

A spokesperson from Citigroup didn’t reply to a request for comment.

The deal marks Citigroup’s first large public offering in Canada since 2015, according to data compiled by Bloomberg. That $600 million deal has a 4.09 per cent coupon and will mature next year. The bank sold loonie-denominated debt in small pieces in 2021 and 2023, Bloomberg-compiled data show.

Monday’s deal comes after the bank reported better-than-expected earnings more than a week ago. It is the second maple bond offering from a large U.S. bank in the past week, following Wells Fargo & Co.’s $1.25 billion deal that drew orders twice its size.

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The two deals have emerged at a time when many Canadian companies, including banks, are going overseas to sell debt, often for better pricing. That’s led to a slowdown in supply and thirsty investors looking to deploy cash.

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