Citi ups racial equity ante with four Black-owned firm hires
Citi has announced that it worked exclusively with four Black-owned firms to syndicate a US$2.5 billion bond issuance.
The Wall Street bank issued a US$2.5 billion six-year non call 5-year fixed-to-floating rate note indexed to SOFR. Citi hired four Black-owned financial firms to distribute the bonds to investors, which priced on January 21.
The firms included Blaylock Van, LLC; CastleOak Securities, L.P.; Global Oak Capital Markets and Loop Capital Markets LLC.
“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,” states Citi’s CFO,
Mark Mason, one of t he industry’s most senior Black executives.
Minority-owned broker dealers and Black-owned firms in particular have historically and largely been shut out of the capital markets, according to Mason, despite recent data showing that “investing in these firms is good business and adds to the economy”.
According to the Citi GPS report, if the key racial gaps for Black Americans in wages, housing, education and investment are closed today, US$5 trillion could be added to United States GDP over the next five years.
Citi’s commitment to closing the racial wealth gap
This move by Citi reinforces the company’s commitment last year to not only becoming an anti-racist institution, but to also increase racial equity in the capital markets and broader financial services industry.
In September 2020, the Wall Street bank unveiled a US$1 billion Action for Racial Equity initiative to help close the racial wealth gap in the US. The initiative outlined four key features for Citi to build on with these incuding:
- To facilitate greater access to banking and credit for communities of colour
- To expand access to home ownership for Black Americans
- To increase focus on anti-racist practices in the financial services industry
- To increase investments in Black-owned businesses
In a statement in September, Citi CEO Michael Corbat emphasised that addressing racism and closing the racial wealth gap is the “most critical challenge we face in creating a fair and inclusive society” and that Citi was committed to using its resources and influence to “combat the impact of racism in our economy”.
Since 2015, Citi has worked with over 30 firms owned by underrepresented minorities, women and veterans totalling more than US$150 billion in bond issuance.