Citigroup Wealth Arm Stops Accepting Adani Securities, LTV Ratio Cut to 0

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Citigroup Wealth Arm Stops Accepting Adani Securities, LTV Ratio Cut to 0
Credit: © Reuters.

By Malvika Gurung -- In the most recent development around Adani Group’s ongoing crisis, the American multinational investment bank Citigroup 's (NYSE: C ) wealth unit has put a stop on accepting securities of the ports-to-power conglomerate’s companies as collateral for margin loans offered to its clients, a day after its peer Credit Suisse (SIX: CSGN ) was reported to take a similar approach.

Citi’s wealth unit has cut the loan-to-value (LTV) ratio for credit against Adani securities to zero on Thursday, stated a source privy to the matter.

In an internal memo accessed by Bloomberg, the American investment banking major noted the dramatic price drop of Adani-issued securities in recent days, adding that plummeting stock and bond prices are a result of negative news around the group’s financial health.

Citi’s unit has said that it has removed its lending value to all Adani-issued securities with immediate effect, as its estimates suggest that the impact of this decision to its margin lending portfolio is limited, the report further cited.

Thanks to the 106-page report released by the US investment research firm Hindenburg Research filled with allegations against Adani Group, the scrutiny of the conglomerate’s finances is getting further engulfed in crisis.

On Wednesday, reported that the Switzerland-based global investment bank Credit Suisse Group AG stopped accepting the bonds of Adani Group companies as collateral for margin loans to its private banking clients, assigning a zero lending value for the notes sold by Adani Ports and Special Economic Zone (NS: APSE ), Adani Green Energy (NS: ADNA ) and Adani Electricity.

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