Citigroup Eyes New Private Credit Strategy Next Year: Report

Citigroup Inc C is reportedly poised to venture into direct lending, aiming to debut this new strategy by early January, reflecting a broader trend among banks seeking to tap into the burgeoning $1.6 trillion private credit market.

The initiative aims to complement Citigroup's existing broad syndicated leveraged finance business.

Related: Citigroup Restructures, Targets 10% Senior Management Layoffs.

Bloomberg noted that Citigroup's approach may or may not involve leveraging its balance sheet to secure deals. The bank's initiative aligns with recent industry shifts, following similar steps taken by major players like Wells Fargo & Co WFC, Barclays Plc BCS, and Societe Generale SA SCGLY.

These financial institutions are all seeking entry into the swiftly expanding realm of private debt, disrupting traditional avenues for financing by offering alternatives to high-yield bonds and leveraged loans.

The strategic move by Citigroup is poised to offer potential borrowers a spectrum of options, including high-yield bonds, leveraged loans, or private credit, thereby catering to the diverse needs of companies or their private equity owners. This preparedness reportedly aims to align with an anticipated surge in buyout deals, as private equity firms eventually plan to divest existing portfolio companies to reimburse investors.

Price Action: C shares are up 0.20% at $45.18 during the premarket session on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.