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Citigroup (C) Eyes Asset-Based Lending Partnership With LuminArx

Citigroup Inc. C is in advanced talks to team up with LuminArx Capital Management for a new asset-based lending strategy, per a Bloomberg article that cited people with knowledge of the matter.

The big bank’s markets division is negotiating a structure to acquire a minority stake in LuminArx gradually. While a deal has not been agreed on, people knowledgeable about the matter stated that the same could be announced if a deal is agreed upon in the upcoming weeks.

The discussions are C’s latest efforts to enhance the footprint in the booming private lending markets. The partnership will facilitate originations and provide back-leverage on asset-backed debt.

Beside this, C is exploring a direct lending partner to complement its existing broadly syndicated leveraged finance business.

C recently announced that it would team up with Traydstream, a preeminent provider of innovative trade documentation solutions, to offer automated trade-document processing capabilities to clients.

Traydstream offers cloud-based automated document-checking solutions to speed up time-consuming trade procedures like letters of credit and collections. Hence, with the collaboration, Citigroup’s clients can use a wide variety of pre-loaded document types and an innovative rules engine to automate the processing steps.

Businesses engaged in cross-border trade need timely and efficient management of documentation. To cater to this need, Citigroup and Traydstream will streamline the process of reviewing and examining documentation in line with the documentary credit terms.

This will help clients mitigate manual process risks, and reduce operational load and costs.

C shares have gained 17.9% in the past three months compared with the industry’s rise of 9.4%.


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The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Given the opportunities in the private credit market, banks like Citizens Financial Group, Inc. CFG and JPMorgan Chase & Co. JPM have also been looking for prospective partners as they wish to expand their offerings in the private lending business.

Citizens Financial, capitalizing on the increasing private capital activity, is undertaking discussions with potential sponsors, per a Bloomberg article. Per a source familiar with the matter, CFG has still not concluded any agreement or finalized any deal.

Also, JPM is on the lookout for a potential partner to enhance its operations in the private credit space. This was first reported by Bloomberg in early November. Per people familiar with the matter, the discussions were at an early stage with various sovereign wealth funds, endowments and alternate asset managers.

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