Capital Markets

Citigroup Bond Issuance May Total $25 Billion

The bank increased its debt issuance forecast due to lower-than-expected second-quarter earnings, balance-sheet growth, and the acquisition of Sout...
Stephen TaubJuly 22, 2004

Citigroup plans to sell $23 billion to $25 billion of debt in 2004, up from an originally planned $18 billion to $21 billion, according to Reuters. Treasurer Guy Whittaker reportedly made this announcement during a presentation for fixed-income investors.

The reasons for increasing its debt issuance forecast included lower-than-expected second-quarter earnings, balance-sheet growth, and the acquisition of South Korean bank KorAm.

Last year, the world’s largest bank issued nearly $23 billion in bonds.

Keep in mind that financial institutions regularly issue more fixed-income paper than nonfinancial companies. So far in 2004, Citigroup has issued $13.2 billion in debt, nearly half of it outside the United States, according to the account of Whittaker’s presentation.

Further, Citigroup Global Markets Holdings separately plans to issue about $12.5 billion in debt for the year, according to Whittaker — nearly double the roughly $7 billion reportedly forecast by the unit in January.

In other bond-issuance news, two large foreign companies are tapping the U.S. fixed-income markets this week.

The Jean Coutu Group Inc., Canada’s second-largest drugstore chain, sold $1.2 billion of two-part notes in the private placement market, led by Merrill Lynch & Co. and Deutsche Bank Securities Inc. They included $850 million in 10-year notes and $350 million in 8-year notes.

And Nissan Motor Co., Japan’s second-largest automaker, said it plans to issue as much as $1.5 billion of commercial paper in the United States, its first such issue there in seven years, according to CBS MarketWatch.

On Tuesday, Standard & Poor’s raised its long-term corporate credit and debt ratings on Nissan to BBB-plus from BBB, reflecting “further improvement in the automaker’s operational and financial performance on the back of its stronger competitive position.”