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Citigroup (NYSE:C) and Apollo Global Management (NYSE:APO) are stepping up their game in private credit, offering a financing package to bidders eyeing Boeing's (NYSE:BA) Jeppesen navigation unit. With Boeing looking to offload non-core assets to trim its $58 billion debt, the Jeppesen sale could bring in around $7 billion. What makes this deal stand out? It's the first major test of Citi and Apollo's private staple financing, where Citigroup leverages its M&A expertise, and Apollo brings the cash. A move like this signals a bigger shiftWall Street banks aren't just watching private credit firms take over; they're jumping in.
This deal is part of a larger trend reshaping finance. With traditional banks losing ground to cash-heavy private credit players, firms like JPMorgan Chase (NYSE:JPM) are fighting backJPM recently set aside $50 billion to expand direct lending, and Wells Fargo teamed up with Centerbridge Partners on a $5 billion fund. Now, Citi and Apollo's $25 billion partnership is taking center stage. If this financing package helps secure a buyer for Jeppesen, it could set a new playbook for Wall Street, blending advisory muscle with private credit firepower to stay competitive in leveraged finance.
But here's the catchsecuring Citi-Apollo financing doesn't mean a bidder wins the deal. Jeppesen's sale is already in its second bidding round, and companies like RTX Corp., Honeywell, Carlyle Group, Thoma Bravo, and Warburg Pincus are all in the mix. Some may opt for traditional bank loans or seek out alternative private credit deals. With M&A activity still navigating uncertain waters, this sale isn't just about Boeing's asset restructuringit's a test case for how Wall Street banks and private credit giants shape the next wave of big-money deals.
This article first appeared on GuruFocus.