Citizens Financial Group, Inc. CFG priced two debt offerings. This comprises a CFG offering of $750 million of 4.300% subordinated notes due 2025 and a Citizens Bank (a wholly-owned subsidiary of Citizens Financial) offering of $750 million of 2.300% senior unsecured notes due 2018.
Subject to customary closing conditions, both the offerings are anticipated to close on Dec 3, 2015.
Citizens Financial will utilize the proceeds from the subordinated notes to buy back $750 million of subordinated notes currently held by The Royal Bank of Scotland Group plc RBS, which sold its remaining stake in the Rhode Island-based bank’s common stock in October.
The proposed buy back comes in accordance with the previously disclosed agreement between Citizens Financial and RBS to trim down RBS’ ownership of CFG subordinated notes. The effort reflects yet another move by Citizens Financial to fully extricate from RBS.
Regarding the bank senior notes, the offering will aid in diversifying the funding sources of Citizens Bank. The company plans to use the net proceeds of the offering for meeting general corporate purposes.
Joint bookrunning managers of the subordinated notes offering include RBS, Credit Suisse Group AG CS, and Citigroup Inc. C. Bookrunners for the bank senior notes offering include Morgan Stanley and Credit Suisse.
Citizens Financial currently carries a Zacks Rank #3 (Hold).
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