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CITIBANK DEVELOPS CORPORATE LOAN INDEX

 NEW YORK, Feb. 12 /PRNewswire/ -- Citibank today introduced the Citibank Loan Index, the first comprehensive measure of the U.S. corporate loan market, recognizing the importance of and growing interest in this sector of the financial markets. The Index, computed and published monthly, will give both banks and institutional investors an effective tool for assessing the performance of their portfolios against a broad-based, objective benchmark.
 "Our initial objective for devoting resources to The Citibank Loan Index was to enhance our own portfolio management procedures," Rod Ballek, managing director of Portfolio Management for Citibank's North American Global Finance businesses, said. "As development of the Index progressed, we also saw great demand from other banks and institutional investors for a comprehensive, unbiased benchmark for performance analysis."
 Historically, corporate loans have proven to be an effective hedge against inflation and have offered higher risk-adjusted returns than comparable investments such as cash-equivalent instruments and fixed income securities. Prior to the Citibank Loan Index, corporate loans represented one of the few major asset classes that lacked an index for performance measurement, a key reason many institutional investors refrain from participating in the market. The Citibank Loan Index establishes, for this class of private market investment, the same performance measurement tools and information previously available only to traditional public market investments.
 The broad-based Citibank Loan Index comprises floating rate revolver and term loans made to publicly rated U.S. borrowers. This pool represents over 1,000 loans to over 600 companies with commitments approximating $400 billion. The Citibank Loan Index provides coupon, bond equivalent and total returns, as well as cumulative returns. In addition, it allows investors to look at performance based on a variety of criteria including: industry, risk rating, tenor and loan type.
 By providing returns and market profile data, the Citibank Loan Index creates a standard for investors to evaluate investment decisions, market opportunities and performance of their loan portfolios.
 The Citibank Loan Index, by establishing a benchmark for this asset class, should help to broaden the investor base to include pension funds, insurance companies and other institutional investors not currently in this market. In addition, it should contribute to increasing liquidity in the syndication and secondary trading markets as lending institutions rebalance their portfolios and institutional investors enter the market. Expanding the investor base for corporate loans could also free up banks' balance sheets for incremental lending activity to support an economic expansion.
 "By increasing the available information and accessibility of this market to both banks and institutional investors, it is expected that the Citibank Loan Index will make a significant contribution to increasing the liquidity of the corporate loan market," said Yuri Mostovoy, vice president of Portfolio Analytics. "Our objective in publishing the Citibank Loan Index is to provide market participants with a framework against which they can construct and manage a loan portfolio with an objective reference to the overall market or a customized index with explicitly defined characteristics."
 Data pertaining to the corporate loans included in the Citibank Loan Index is supplied by Euromoney, which compiles extensive information on loans to publicly traded U.S. companies, as well as a significant number of private
deals. All data used in calculating the Index is subject to extensive verification procedures by Citibank.
 The Citibank Loan Index meets standard industry requirements for indices: it is a passive, unbiased representation of the overall market; it can be replicated; it is stable in terms of its inclusion criteria; it is open with respect to new issues; and it is non-gameable.
 -0- 2/12/93
 /CONTACT: Amy Dates of Citibank, 212-559-7608/


CO: Citibank ST: New York IN: FIN SU: PDT

TS -- NY007 -- 6090 02/12/93 10:37 EST
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Publication:PR Newswire
Date:Feb 12, 1993
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