Citi boosts muni funds with $1 billion

The funds, sold to wealthy customers under the names named ASTA and MAT, have a total of $15 billion in assets.

Citigroup Inc. will inject $1 billion into six municipal bond funds that have dropped in value, according to a report in The New York Times.
The funds, which were sold to wealthy customers under the names named ASTA and MAT, have a total of $15 billion in assets, according to the report.
About $600 million had been provided as of last week, according to people briefed on the situation.
A Citigroup spokesman said yesterday that the bank considered the recent capital infusions attractive investments.
“The returns have been hurt by one of the most volatile periods for fixed income, in particular municipal markets, in recent memory,” Jon Diat said, according to the report.
Citigroup’s alternative investments unit has been particularly hard hit in recent months.
Last month, Citigroup suspended redemptions in CSO Partners, a large corporate debt fund, after investors tried to withdraw more than a third of its $500 million in assets (InvestmentNews, Feb. 15) .
In January, Citigroup injected $100 million into the fund, which suffered heavy losses last year.
Citigroup also rescued seven affiliated investment funds, shifting more than $49 million in securities onto its already strained balance sheet, according to the report.