Citigroup Bumping BofA Couldn’t Preserve Pandit

Citigroup, which last week ousted CEO Vikram Pandit over management missteps, is staging a comeback in corporate-bond underwriting as it helps overseas companies borrow in the U.S.

Bloomberg reports that Citigroup, the top underwriter of bond sales worldwide in the decade before the 2008 financial crisis, has managed 6.1% of sales this year, up from 5.7% in 2011, according to data compiled by Bloomberg that excludes self-led deals. The New York-based lender climbed to second in rankings from fourth last year, closing in on JPMorgan Chase and relegating Bank of America to third.

From Asia to the U.S., issuance of corporate bonds totals $3.2 trillion this year, second only to 2009’s pace, as central banks led by the Federal Reserve cut interest rates to record lows and investors seek riskier assets. Citigroup’s global reach has helped it win underwriting business from companies including Heineken NV (HEIA) and Nippon Life Insurance Co. looking to tap U.S. markets amid unprecedented demand for dollar-denominated assets.

Citigroup views 'underwriting, particularly in an environment where yields are still dropping, as a lower risk and more profitable activity', Anthony Valeri, market strategist at LPL Financial in San Diego, said in a telephone interview. 'It probably seems like an easier decision given the Fed’s support of the bond market and the demand to refinance'.

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Citigroup Bumping BofA Couldn’t Preserve Pandit: Credit Markets

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