For the first time ever, Citi has hired four Black-owned firms to syndicate a $2.5 billion bond issuance.
The action is part of efforts by the New York-based firm to promote racial equity in the capital markets and broader financial services industry. The financial services giant added the collaboration with minority-owned brokers dealers reinforces Citi’s commitment to closing the racial wealth gap in America.
The businesses hired to distribute bonds to investors included Blaylock Van, CastleOak Securities, Global Oak Capital Markets and Loop Capital Markets. CastleOak Securities and Loop Capital are on BLACK ENTERPRISE’s latest BE Investment Banks list.
“Minority-owned broker dealers, Black-owned firms in particular, have historically and largely been shut out of the capital markets,” Mark Mason, Citi’s chief financial officer, stated. “Yet, recent data shows that investing in these firms is good business and adds to the economy. As we continue to do the work to become an anti-racist institution and drive finance toward a more equitable and inclusive industry, we will do our part by engaging firms that reinvest into the Black community.” Mason is among the top Black executives in the industry.
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. In December 2020, Allstate Corp. 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 (MWVBEs).
Additionally, multiple large U.S. banks and companies in 2020 committed tens of billions of dollars to fight racism after the police killing of George Floyd, and the Black Lives Matter protests.
If the key racial gaps for Black Americans in wages, housing, education and investment are closed today, $5 trillion could be added to U.S. GDP over the next five years, according to a Citi GPS report. The bond deal also comes after Citi unveiled a multi-pronged $1 billion Action for Racial Equity initiative in September 2020, geared to help close the racial wealth gap in the United States.
Citi, the brand name for the global bank Citigroup, reported the drive includes a goal to strengthen the firm’s own policies and practices, including the expansion of its core business activities with minority-owned broker dealers and depository institutions.
Michael Verdeschi, Citi’s treasurer, reflected on the new deal: “Citi continues to proactively seek opportunities to partner with diverse syndicate groups for our bond offerings,” he stated. “The successful execution of this transaction demonstrates the benefits of providing greater access to the capital markets to traditionally underrepresented firms.”
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