Citigroup Said to Merge Two U.S. Leveraged Finance Groups

Citigroup Inc. (C) is combining its leveraged finance origination and syndication businesses in the U.S., according to two people with knowledge of the matter.

The new unit will be managed by Tom Cole, co-head of U.S. leveraged finance, and John McAuley, who formerly headed the high-yield debt distribution group for North America at the third-biggest U.S. lender, said the people, who asked not to be identified because the changes haven’t been announced publicly.

Barbara Matas, co-head of U.S. leveraged finance, was named chairwoman of the newly combined group, the people said. The changes, which were announced internally yesterday, are effective immediately.

William Hughes will continue to lead loan syndication and was named global head of a newly-formed leveraged finance portfolio group, the people said. That team will manage Citigroup’s holdings of high-yield loans, working with the firm’s banking, risk and capital markets origination departments, the people said.

Robert Julavits, a Citigroup spokesman, declined to comment.

Citigroup was the sixth-largest underwriter of leveraged loans in the U.S. in 2012, arranging $38.1 billion of the debt, according to data compiled by Bloomberg. It ranked third in U.S. high-yield bond underwriting last year with $33.8 billion, according to the data.

Leveraged loans and high-yield bonds are those rated below BBB- by Standard & Poor’s (MHP) and less than Baa3 at Moody’s Investors Service. (MCO)

To contact the reporter on this story: Kristen Haunss in New York at khaunss@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net