Tags: citigroup | 900 million | loan | blunder | occ | fed | scrutiny

Citigroup's $900 Million Loan Blunder to Face OCC, Fed Scrutiny

Citigroup's $900 Million Loan Blunder to Face OCC, Fed Scrutiny
(Alexey Novikov/Dreamstime)

Monday, 17 August 2020 04:52 PM

Citigroup Inc. has started briefing bank regulators on how it mistakenly sent almost $900 million in payments to Revlon Inc.’s lenders amid a bitter a fight between the cosmetics company and creditors.

The bank is in contact with watchdogs including the Office of the Comptroller of the Currency and the Federal Reserve about the situation, according to people familiar with the matter, who asked not to be named discussing private discussions. Citigroup last week told Revlon’s lenders the payments were tied to a clerical error.

The roughly $900 million -- an amount equal to the full principal value of the loan, plus accrued interest -- landed in the lenders’ bank accounts last week. While some opted to return the funds to Citigroup, others -- including including Brigade Capital Management, Symphony Asset Management and HPS Investment Partners -- have at least initially refused to give the money back.

Bank regulators aren’t likely to settle that dispute. Rather their focus will be on making certain that any lapses at the New York-based bank can’t be repeated and that they don’t reveal deeper problems that pose a threat to its stability.

Citigroup had been in the process of resigning as administrative agent on the loan prior to the blunder. Representatives for the bank and regulators declined to comment.

© Copyright 2021 Bloomberg News. All rights reserved.


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Citigroup Inc. has started briefing bank regulators on how it mistakenly sent almost $900 million in payments to Revlon Inc.'s lenders amid a bitter a fight between the cosmetics company and creditors
citigroup, 900 million, loan, blunder, occ, fed, scrutiny
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2020-52-17
Monday, 17 August 2020 04:52 PM
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