Funding Circle’s fund unveils Citibank deal

FUNDING Circle’s listed fund has inked a deal with Citibank, whereby the financial institution indirectly channels £50m to small businesses through the peer-to-peer lending platform.

The transaction was announced by the Funding Circle SME Income Fund (FCIF) on Wednesday.

Under a rather complicated structured finance deal, Citibank’s London branch will advance a senior, floating rate loan of £50m through two Irish special purpose vehicles. The facility matures in December 2026.

FCIF said the deal will support its target dividend yield of six to seven per cent per year.

Read more: The biggest P2P funding deals of 2017

“We are very pleased to be able to complete this transaction on attractive terms with Citibank London, having received financing proposals from a number of parties,” said Richard Boleat, chairman of the FCIF.

“The senior facility will be fully drawn on closing of the transaction, and the [FCIF’s] leverage ratio, on a ‘look through’ basis, will be approximately 49 per cent, consistent with the board’s approved leverage limit of 50 per cent.”

The P2P sector has seen a number of City funding deals in recent months. MarketInvoice has partnered with Investec and Germany’s Varengold, while ThinCats announced the conclusion of a £200m funding programme led by Waterfall Asset Management.

And former Peer-to-Peer Finance Association member LendInvest unveiled a long-term financing partnership with Citi in November to fund buy-to-let mortgages.