Skip to content
Subscriber Only

Banks' Shackled Balance Sheets Make Them Bond Market's Darlings

  • Bank bonds have returned five times more than corporate debt
  • Regulations mean bank bonds are now like `utilities'
Updated on

Boring is proving to be profitable for investors who bought the debt of Citigroup Inc., Goldman Sachs Group Inc. and other Wall Street banks. Gains on bonds issued by these firms are exceeding the paltry gains on all other corporate bonds.

While regulations and more than seven years of near-zero interest rates have crimped the ability of financial firms to embark on shareholder friendly activities, such as dividends, stock buybacks and takeovers, it has made their debt one of the few bright spots in the bond market.