Schwab to issue debt after news of job cuts

Schwab to issue debt after news of job cuts
The longest-dated portion of the firm's senior unsecured notes, an 11-year fixed-to-floating-rate note, may yield about 2.05 percentage points over Treasuries.
AUG 22, 2023
By  Bloomberg

Charles Schwab Corp. is looking to raise fresh debt in the U.S. investment-grade bond market after revealing plans Monday to cut jobs and close or downsize offices to curb costs. 

The financial services firm brought a benchmark-sized deal of senior unsecured notes Tuesday, according to a person familiar with the matter, who asked not to be identified as the details are private. Initial pricing discussions for the longest-dated portion of the sale, an 11-year fixed-to-floating-rate note, may yield in the area of 2.05 percentage points over Treasuries, the person said. 

Westlake, Texas-based Schwab, which operates both brokerage and bank businesses, intends to use the sale proceeds for general corporate purposes. The firm last tapped capital markets in May, selling a $2.5 billion blue-chip bond. That marked the firm’s first debt issuance since a series of regional bank failures rattled the broader banking industry, beginning in March. 

Schwab’s current raise comes after the firm said in a regulatory filing Monday that it plans to shutter or downsize some real estate and lower employee head counts to save at least $500 million in costs annually, amid investor pressure. 

Earlier this month, the firm reported temporarily lower net flows of client money as it sees attrition of some retail and advisory clients’ assets while integrating TD Ameritrade into its business. 

In recent weeks, a string of large US banks including PNC Financial Services Group Inc., Bank of America Corp., Goldman Sachs Group Inc. and Huntington Bancshares Inc. have also issued debt in the U.S. investment-grade bond market. 

Charles Schwab did not respond to a request for comment.

Why alternative assets belong in retirement accounts

Latest News

RIA moves: The Mather Group, Brand Asset Management announce deals
RIA moves: The Mather Group, Brand Asset Management announce deals

Consolidation continues in US wealth management industry.

US broker-dealer fintech aims for global footprint as it acquires international firm
US broker-dealer fintech aims for global footprint as it acquires international firm

Tech company democratizes access to US trading infrastructure.

Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel
Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel

RBC Wealth Management's latest move in New York adds an elite eight-member team to its recently opened Westchester office.

Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints
Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints

Stifel – so far - is on the hook for more than $166 million in damages, legal fees and settlements in investor complaints involving Roberts, a 35-year industry veteran.

iCapital secures $820M in latest funding, hits $7.5B
iCapital secures $820M in latest funding, hits $7.5B

The giant alt investments platform's latest financing led by T. Rowe Price and SurgoCap Partners, along with State Street, UBS, and BNY, will fuel additional growth on multiple fronts.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.