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Regional US Banks to Weigh Costly Bond Sales as Depositors Exit

Smaller banks that tap market seen having to pay concession
Post-earnings debt sales seen as muted for money-center banks

A customer uses a drive-thru ATM at a bank branch in San Antonio, Texas. — A customer uses a drive-thru ATM at a bank branch in San Antonio, Texas.
Photographer: Callaghan O'Hare/Bloomberg

By

Josyana Joshua and

David Caleb Mutua

April 14, 2023, 4:06 PM UTC

Beleaguered US regional banks are assessing whether bond sales to replace lost deposits are worth the cost, as credit investors weigh whether they’re worth the risk.

The arrival of quarterly bank earnings reports on Friday has spurred speculation on which financial institutions will brave an unpredictable bond market. Average corporate note yields jumped above 6% in the past 12 months and still remain above 5%, more than a percentage point higher than the year-ago period.