Citi’s $2.5 Billion Bond Issuance Levels Up With Black-Owned Firms

CBx Vibe:Big Bank” YG Feat. 2 Chainz

By CultureBanx Team

  • Citi is working with four Black-owned investment firms to distribute a $2.5B bond issuance
  • U.S. GDP could increase by $5T dollars over the next five years if the key racial wealth gaps for African Americans are closed

Wall Street giant Citigroup (C +0.27%) is exclusively working with four Black-owned investment firms for a strategic $2.5 billion bond issuance. The bonds which were priced last month will be distributed by Blaylock Van, CastleOak Securities, Global Oak Capital Markets and Loop Capital Markets. Will this move by the banking giant actually reinforce its commitment to creating racial equity in the capital markets?

Why This Matters: The bond deal, done in commemoration of Dr. Martin Luther King Jr. Day, marks the second time in recent weeks that a large U.S. financial services firm has made such a move. For this transaction, Citi issued a $2.5 billion six-year non call 5-year fixed-to-floating rate note indexed to SOFR. This move could further help  Citi as it looks to strengthen its expansion of core business activities with minority-owed broker dealers, and depository institutions.  

Since 2015, Citi has tapped more than 30 firms owned by underrepresented groups for bond issuances

“Minority-owned broker dealers, Black-owned firms in particular, have historically and largely been shut out of the capital markets. Yet, recent data shows that investing in these firms is good business,” Citi Chief Financial Officer Mark Mason said in a statement. Mason is among the top Black executives in the industry.

Since 2015, Citi has tapped more than 30 firms owned by underrepresented groups for bond issuances totaling more than $150 million. A recent GPS report from Citi found that the U.S. GDP could increase by $5 trillion dollars over the next five years if the key racial wealth gaps for African Americans across housing, wages, education and investments are closed today.

Situational Awareness: In December 2020, Allstate (ALL -0.20%) announced that it priced $1.2 billion of 5-year and 10-year senior notes via a syndicate made up of only minority, women and veteran-owned business enterprises. Additionally, last September Verizon (VZ +0.33%) Communications hired Loop Capital and another Black-led firm, Siebert Williams Shank, as lead underwriters of a $1 billion green bond offering.

CBx Vibe:Big Bank” YG Feat. 2 Chainz

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CultureBanx Team

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