Talks to sell Citigroup’s high-risk-borrower lender, OneMain, have been put on hold given the depressed macroeconomic environment, according to several media reports.
The Wall Street Journal reported that negotiations with private-equity firms Centerbridge Capital Partners and Leucadia National as well as Warren Buffett’s Berkshire Hathaway collapsed because of concerns that the economic uncertainty and the volatile credit markets can make it hard to fund the lending business.
The private equity firms would have had to resort to securitization to fund the purchase of OneMain but the viability of the securitized markets today made the companies step back from the deal, according to a New York Times report.
Formerly known as CitiFinancial, OneMain offers mortgages, car and other loans to high-risk borrowers. It will remain in Citi’s CitiHoldings portfolio, which contains other assets Citi plans to get rid of over time.