US regional banks get solid welcome for new bonds

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Two major U.S. regional banks raised a total $4.75 billion selling bonds on Thursday, on the back of strong demand in a sign that fixed income investors are no longer jittery about regional banks after the March banking crisis.

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19 Jan 2024

Citizens Bank on Thursday sold $1.25 billion in six-year senior unsecured callable fixed-to-floating rate notes. U.S. Bancorp, meanwhile, sold $3.5 billion in six-year and 11-year callable senior unsecured fixed-to-floating rate notes.

The banks' deals follow Wednesday's $2.5 billion bond sale by peer PNC Bank. The sale was met with strong investor demand and its book received over six times that amount in orders.

Market participants expect similarly strong demand for today's bank deals, in a sign that investors have gotten over last March's regional banking crisis, where three small-to-mid size U.S. banks failed over the course of five days.

«There is very strong demand for credit right now for the regional banks,» said Natalie Trevithick, head of investment-grade credit strategy at asset manager Payden & Rygel.

«It