Citigroup Inc. (C) sold 315 billion yen, or $2.92 billion, in three-year samurai bonds, yen-denominated corporate bonds issued by non-Japanese entities, to retail investors in Japan, media reported Tuesday. The bonds were rated AA- by Standard & Poor's, Aa3 by Moody's Investors Service and AA- by Fitch Ratings.
Recently, the market for Samurais has grown while lenders in the U.S. and Europe are wary of the global credit crisis. Low interest rates in Japan also have boosted the demand for samurai bonds this year. Further, yields on 10-year notes have declined to 1.4% in Japan on August 29 amid fears of interest rate hike by the country's central bank.
Mizuho Securities Co. and Nikko Citigroup Ltd. were the underwriters of the deal, while Nikko Citigroup acted as lead manager.
According to reports, Merrill Lynch & Co. said, sales of samurai bonds are expected to exceed 3 trillion yen in 2008 for the first time since 1996.
The New York-based Citigroup's Samurai bonds have a coupon rate of 3.22%, higher than the 2.66% paid by the bank when it sold 186.5 billion yen in bonds to Japanese investors on June 12. Based on the dollar exchange rate at the time of issue, the current issue is the largest Samurai bond issue ever.
Also, Citigroup's June bond sale is said to be the first by a major U.S. bank after Goldman Sachs's (GS) bond sale of 148.5 billion yen in late January. In June 2007, Citigroup sold six sets of Samurai bonds totaling 270 billion yen to institutional investors.
Reports also said that Rabobank Nederland, Royal Bank of Canada (RY.TO), South Korea's Kookmin Bank and Australia & New Zealand Banking Group are the first-time issuers in the Samurai bond market this year.
Four other foreign firms have reportedly filed at Japan's Ministry of Finance this month to issue Samurai bonds soon. Those include the first-time issuance by National Grid Gas, a U.K.-based electricity and gas company.
The biggest ever corporate bond sale in Japan was in January 2002 when Osaka-based Matsushita Electric Industrial Co. sold 300 billion yen in corporate bonds.
There was a report by the Wall Street Journal last month that Citigroup, in its latest attempt to reorganize its business, plans to revamp the structure of its capital markets business within its investment banking division. As per the report, the bank's capital markets business, which includes equity and fixed-income traders, is expected to be organized geographically along with its current product lines.
The bank's move is seen as part of its effort to revitalize its operations, which were worst hit by the subprime mortgage crisis. Citigroup, the biggest U.S. bank by assets, has booked about 10% of the total $396 billion in credit losses incurred by financial institutions worldwide since last year.
For the recently closed second quarter, the company reported a net loss of $2.5 billion, hurt by more than $7 billion in credit-market write-downs at its securities and banking division, in addition to higher consumer credit costs in North America.
C is trading at $20.26, down $0.06, on a volume of 14.27 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.