01/22/2010

Citigroup Gearing Up Conduit-Loan Program

Citigroup is dipping its toes back into the conduit market.

The bank is putting together the parameters of a program that would resume the origination of loans for securitization. While origination goals and other details haven't been worked out, the bank will apparently target fixed-rate loans of up to $50 million, underwritten to conservative standards. Citi would pursue mortgages on the major property types, excluding hotels.

The bank becomes the latest in the string of lenders turning their sights back to securitization after a virtual market lockdown that started in mid-2008. Others that have resumed the targeting of commercial MBS loans over the past few months include Bank of America, Bridger Commercial Funding, Deutsche Bank, J.P. Morgan and RBS, although it is unclear how much lending is actually being done.

Citi was an active CMBS originator before the market collapsed. In 2007, it securitized $6.9 billion of U.S. loans, ranking 13th in the industry. That year it was the 10th-largest U.S. bookrunner, with $11.5 billion of volume.

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