Charles Schwab (NYSE:SCHW) stock slipped 1.4% in Wednesday after-hours trading as the brokerage behemoth sought to sell $2.5B in senior notes, the Wall Street Journal reported, citing people familiar with the matter.
In an SEC filing released during the premarket session, SCHW said it would offer senior notes due 2029 and 2034, the net proceeds of which would go toward “general corporate purposes, including, without limitation, investments in our subsidiaries and supporting business growth.”
Shares of Schwab (SCHW) have come under downward pressure since the March banking tumult, off roughly 35%, as investors priced in their concerns about paper losses to its bond portfolio in the wake of rising interest rates. On top of that, its bank deposit balances of $106.5B in Q1 plunged 14% from the prior quarter as brokerage customers kept moving their cash into higher-yielding money-market funds, a process known as cash sorting.
Earlier this month, though, Schwab (SCHW) said outflows from bank sweep deposits and bank deposit accounts of $1.00B slowed from $1.19B in March, $1.36B in February and $1.52B in January.
Schwab (SCHW) CEO Walt Bettinger told the Journal in a March interview that the company could keep operating even if it faced a deposit flight over the next year.
The senior debt offerings were expected to be priced Wednesday afternoon, the people told the WSJ.