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Macro US Stocks

Citigroup and Wells Fargo Sell Investment-Grade Bonds After Fed Rate Hike

Citigroup and Wells Fargo are selling investment-grade bonds after the Federal Reserve raised its policy rate for the first time in three years and credit risk concerns eased. Citigroup plans to raise at least $10 billion through a four-part deal with maturities of three to 11 years, while Wells Fargo plans at least $5 billion across three tranches maturing in four to 11 years. The issuance follows the Fed’s 25 basis point hike and its signal of further increases later this year.

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AI take

Two major banks tapping the investment-grade market right after a Fed hike suggests funding conditions remain open even as policy tightens, and that issuers are willing to pay up before the rate path steepens further. The timing matters for other financial issuers weighing their own windows, since heavy supply from Citigroup and Wells Fargo can absorb demand that might otherwise go to smaller borrowers. Whether the Fed's signal of additional increases later this year compresses new-issue spreads, or whether supply simply clears at wider levels, is the open question.

Generated by AI for reference only.

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