Banks Put Bond-Sale Spree on Pause as Market Volatility Ramps Up

Banks are taking a cautious approach in the investment-grade bond market amid some of the wildest swings in Treasuries in recent memory, waiting for pockets of calm to emerge as they seek to borrow before US officials can raise interest rates or tighten regulations further.

Truist Financial Corp. has been the lone lender to test investor appetite for new bonds in the US this week, marking a sharp slowdown after a $24.5 billion rush of fresh, post-earnings issuance last week. Bank of America Corp., Citigroup Inc. and Morgan Stanley have all held off selling debt. Even regional lender M&T Bank Corp. has remained on the sidelines after holding meetings with investors.

Anxiety is back in the market for high-grade debt thanks to heightened Treasury volatility, a slew of corporate earnings and rising geopolitical tension. That’s adding extra complexity for banks that are under pressure to borrow at current rates — especially as the Federal Reserve looks set to keep borrowing costs elevated after one more potential increase.

“I would have expected some more mid-size regional banks to come to market this week,” said Arnold Kakuda, a senior financials credit analyst at Bloomberg Intelligence. “But maybe they’re just waiting for things to settle down.”

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