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.

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.