Citigroup?s debt riskier than Brazil?s or Mexico?s?

Is Citigroup?s debt riskier than Brazil?s or Mexico?s?

That seems to be the verdict of the bond market after Tuesday?s debt sales that kicked off 2012.

Investors demanded a bigger gap in yields to buy Citigroup?s C debt than bonds sold by Mexico and Brazil, two of the arguably most overbought emerging-market countries.? The yield spread widens when investors want better protection to take on more risks. Citigroup? paid a spread of 360 basis points, or 3.60 percentage points, above comparable debt to sell $2.5 billion in 5-year notes, according to Informa Global Markets.

Brazil sold $750 million in bonds maturing in 2021 at a spread of 150 basis points. Mexico sold $2 billion in 10-year debt at a spread of 175 basis points ? and notice both countries were selling much longer-term debt than the U.s. bank.? That dichotomy has more to do with worries over Citibank and all the banks, said Ken Jaques, credit and derivatives manager at Informa.

? Deborah Levine

Source: http://blogs.marketwatch.com/thetell/2012/01/04/citigroups-debt-riskier-than-brazils-or-mexicos/?mod=WSJBlog

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