Jane Street, the high frequency trading (HFT) firm, issued 6.75 % senior secured notes highlighting how proprietary dealers are now locking in long-term funding to keep their trading capital comfortably ahead of potentially swelling risk-weighting and liquidity demands.
Jane Street Group’s latest foray into the bond market, a US$1.35 billion senior secured note, due 2033, priced at 6.75%, shows how the most active proprietary dealers are turning to long-dated funding. This can be used to keep trading capital well ahead of regulatory and internal risk metrics.
The transaction, launched on 23 April and settled on 25 April, takes the firm’s cumulative bond issuance since January 2024 to US$5.4 billion, with the new paper sitting alongside 2029, 2031 and 2032 maturities in a still-modest debt stack that is otherwise dominated by partner equity.
In its offering memorandum, Jane Street says the net proceeds, around US$1.34 billion after fees, are earmarked “for general corporate purposes”. Management’s broader discussion clarifies that incremental long-term resources support three overlapping objectives.
In 2024, net trading revenue at the firm almost doubled to US$20.5 billion, and value-at-risk (VAR) rose in tandem. More permanent capital lets desks warehouse larger and more volatile positions without breaching internal limits.
The group already holds a US$6.4 billion liquidity buffer and a US$1 billion revolver, fully drawn as of mid-April. Terming-out funding reduces the need to rely on that facility in stressed markets. Given the recurring success of its traders and equity owners this liquidity prevents any hits from partners departures when and if poached elsewhere.
The indenture language allows proceeds to fund “related business assets,” capital expenditure or bolt-on deals that deepen market-making franchises.
S&P Global Ratings, which affirmed its ‘BB’ issuer rating while keeping a positive outlook, views the deal as “illustrative of the firm’s comparatively higher risk appetite” but still supportive of credit quality given Jane Street’s discipline around hedging, diversification, and retention of earnings. The agency calculates a risk-adjusted-capital ratio of 12.3% pro forma the notes, comfortably above peers even after the recent decline driven by balance-sheet growth.
While Fitch rated the bond BB+, S&P added, “We could raise the ratings in the next 12-18 months if the company consolidates its market share gains, continues to diversify across asset classes and geographies, and strengthens its liquidity – all while maintaining its solid capital position.”
Pro forma year-end figures show total long-term debt rising to US $10.7 billion, against members’ equity of almost US $30 billion. Leverage therefore remains low: debt represents barely one-quarter of total capital and less than 30 % of average margin posted to prime brokers.
The new 2033 notes sit behind a US$4.7 billion term-loan B (SOFR-based), US$600 million 4.50% 2029s, US$1.4 billion 7.125% 2031s and US$1.65 billion 6.125% 2032s. Tey are all secured on the same pool of holding-company collateral, the structure leaves ample headroom before the earliest maturity wall appears in late-2029.
Jane Street is not alone in building a public bond curve. Citadel Securities has US$7.2 billion across six tranches, with coupons ranging from 3.375% (2026) to 6.375% (2032). The bulk, US $4 billion, was sold in early 2024/25 at 5.9–6.0% for 2030 and 2032 maturities. Citadel therefore carries a slightly shorter-dated, higher-coupon profile than Jane Street and its bond is rated BBB.
While proceeds are officially “general corporate purposes,” the indenture hard-wires a trading-capital ratio test at 2:1 and requires an asset-sale offer if disposals exceed a US$50 million excess-proceeds threshold.
Even after this wave of issuance, debt is dwarfed by retained earnings. Documents associated with their recent offering show Jane Street’s members’ equity rose 40% year-on-year to US$29.9 billion in 2024, while net trading revenue per employee reached a whopping $6.9 million.
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