Citibank NA, a subsidiary of Citigroup Inc (NYSE:C)., has entered the bond market with the sale of a five-year tranche yielding 1.18 percentage points over Treasuries, as of Tuesday. This move aligns with a broader trend in the banking sector towards operating company debt reduction, previously seen with Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS), and Wells Fargo (NYSE:WFC).
The bank's re-entry into the corporate bond market comes after a significant hiatus, with its last appearance dating back to May 2019. This marks another step in the revival of corporate bond sales following the Federal Reserve's hawkish pause. Other banks that have recently joined this trend include CIBC, ANZ, and Credit Agricole (OTC:CRARY).
The decision by Citibank NA to sell bonds is indicative of an ongoing trend among banks to reduce their operating company debt. This move follows similar actions by other major banks including Bank of America, Morgan Stanley, and Wells Fargo.
This recent bond sale by Citibank NA adds to the momentum in the revival of corporate bond sales. The return to this market by major banks comes after a pause induced by the Federal Reserve's hawkish stance on monetary policy. Other banks that have also returned to selling bonds include CIBC, ANZ, and Credit Agricole.
The move by Citibank NA and other banks to reduce their operating company debt through the sale of bonds is seen as a positive response to the Federal Reserve's monetary policy stance. The revival in corporate bond sales is expected to continue as more banks follow suit.
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