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Wall Street Banks Set to Lose About $600 Million on Citrix Debt

  • Banks still hold about $6.5 billion of $15 billion financing
  • Investors force bank underwriters to pay up to offload risk
Citrix headquarters in Santa Clara, California.

Citrix headquarters in Santa Clara, California.

Photographer: David Paul Morris/Bloomberg
Updated on

Wall Street banks are poised to realize roughly $600 million of losses after offloading financing commitments for the buyout of Citrix Systems Inc. to investors Tuesday, the culmination of months of work to try and mitigate the damage from underwriting pledges made early in the year before a sharp repricing of risk assets.

While a group of underwriters led by Bank of America Corp., Credit Suisse Group AG and Goldman Sachs Group Inc. ultimately found enough demand to sell $8.55 billion of the total $15 billion debt package via the bond and loan markets, investors required significantly higher yields than those the banks promised to private equity firms Vista Equity Partners and Elliott Investment Management back in January, forcing the banks to absorb the losses.