First Republic Bank bonds rally as big banks reportedly draw up rescue funding plan

America's biggest banks are reportedly hashing out a potential plan to rescue First Republic Bank, according to the Wall Street Journal.

Bond issued by First Republic Bank FRC were rallying on Thursday, even as its stock price remained sharply lower, as investors digested a report about a potential rescue plan for the California-based lender.

The lender’s 4.375% coupon bonds due August 2046 were pegged at a spread of 379 basis points over Treasurys, down from a intraday high of 451 basis points above the risk-free rate, according to MarketAxess. Investors have been concerned about regional banks since the collapse of Silicon Valley Bank SIVB and Signature Bank SBNY , which raised concerns about pressures in the banking system as the Federal Reserve has sharply increased interest rates in the past year.

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