NEW YORK - Citigroup Inc. (NYSE: NYSE:C) and Apollo Global Management, Inc. (NYSE: NYSE:APO) have announced the creation of a $25 billion private credit, direct lending program. The initiative, which is currently focused on North America, may potentially extend to other regions. The program is expected to finance a variety of debt opportunities over the coming years, including corporate and financial sponsor transactions.
This collaboration between Citi and Apollo is set to combine the extensive client network and capital market expertise of Citi with Apollo's significant capital resources. The partnership is designed to improve access to private lending capital for corporate and sponsor clients, offering funding certainty for strategic transactions. Both firms anticipate strong demand and have stated that the program's size could expand beyond the initial commitment.
Viswas Raghavan, Head of Banking and Executive Vice Chair at Citi, highlighted the partnership's potential to provide clients with a comprehensive range of private financing solutions, while Apollo Co-President Jim Zelter expressed enthusiasm about the program's ability to enhance Citi's client offerings and increase Apollo's origination flow.
The program will include participation from Mubadala Investment Company as a strategic partner and Athene, an Apollo subsidiary, both of which will have the opportunity to join commitments appropriate for their respective mandates.
Legal counsel for the program is being provided by Cravath, Swaine & Moore LLP for Citi, and Paul, Weiss, Rifkind, Wharton & Garrison LLP along with Sullivan & Cromwell LLP as regulatory counsel to Apollo.
Citi, with its global presence in over 180 countries, is recognized for its wealth management services and banking partnerships. Apollo, known for its alternative asset management and retirement services, had approximately $696 billion of assets under management as of June 30, 2024.
This strategic partnership aims to leverage the strengths of both Citi and Apollo to better serve their clients' financing needs in a scalable and capital-efficient way. The information for this article is based on a press release statement.
In other recent news, Citigroup has faced regulatory hurdles in its China expansion, with delays from U.S. regulators slowing down the establishment of a standalone securities firm in the country. Despite these challenges, Citigroup remains committed to its China operations. In terms of financial management, Citigroup has issued new callable senior and subordinated notes, potentially appealing to different types of investors. The bank's CFO, Mark Mason, has projected a 20% increase in investment banking fees for the third quarter, alongside a predicted 4% decline in markets revenue.
In the wake of executive changes, Robert Walsh and Patrick Scally have been appointed as interim Chief Accounting Officer and Controller, respectively, following the resignation of Johnbull Okpara. A recent Citigroup survey revealed a shift among wealthy families toward riskier investments, away from holding cash. This shift indicates an increased appetite for direct investments in companies at initial funding stages, growth equity, and venture capital investments. These are some of the recent developments concerning Citigroup.
InvestingPro Insights
Citigroup Inc. (NYSE: C), a prominent player in the banking industry, is embarking on a new venture with Apollo Global Management, Inc. that underscores its strategic direction and financial capabilities. According to InvestingPro data, Citigroup boasts a solid market capitalization of $115.19 billion, reflecting its significant position in the market. This is coupled with a respectable P/E ratio of 16.68, which indicates investor confidence in the company's earnings potential.
InvestingPro Tips suggest that Citigroup has maintained dividend payments for an impressive 14 consecutive years, showcasing a reliable return to shareholders. This commitment to dividends is further highlighted by a notable dividend yield of 3.71% as of the last recorded date, which is attractive to income-focused investors. Additionally, the company has experienced a high return over the last year, with a 1-year price total return of 56.35%, signaling strong performance in the market.
For readers interested in further insights, there are additional tips available on InvestingPro, which can be accessed for Citigroup at InvestingPro Citigroup.
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