Citigroup Reaps $100 Million Windfall From Massive AAA CLO Trade
- PGIM offloaded securities to boost liquidity in market rout
- Citi booked gains from $2 billion deal as spreads recovered
Citigroup inc. signage is displayed on the Citigroup Center in Los Angeles, California.
Photographer: Patrick T. Fallon/Bloomberg
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Citigroup Inc. made more than $100 million trading a huge swath of the highest-rated collateralized loan obligations as market turmoil prompted asset managers in need of liquidity to unload securities at steep discounts.
Citigroup bought roughly $2 billion of AAA rated CLO bonds in late March at around 90 cents on the dollar from PGIM, the investment management business of Prudential Financial Inc., according to people with knowledge of the matter. The bank was later able to sell them closer to par as prices recovered, said the people, asking not to be identified discussing a private matter.