LONDON:Financial services major Citigroup has begun talks with private equity groupsand hedge funds over the sale of USD 3 billion-worth of car loans as part of itsefforts to cleanse its balance sheet, says a mediareport.

Attributing to peopleclose to the situation, the Financial Times has reported that Citi had openedtalks with private equity groups and hedge funds over the sale of USD 3 billionworth of car loans.

To make thebusiness more attractive, Citi is believed to have offered to provide buyers ofthe loans with finance for a few years after thesale.

Citing bankers, thereport said the initial response from potential bidders had beenencouraging.

some of Citi loanshave already been securitised under the ‘term asset-backed securities loanfacility’ (Talf), a US government programme aimed at supporting the ailingsecuritisation market.

Anasset-backed security is one whose value and income payments are derived fromand collateralised (or backed) by a specified pool of underlyingassets.

According to thepublication, however, some private equity groups and hedge funds that havelooked at the assets said the lack of a thriving market for securitised bonds,which are backed by cash flow from loans, made them lessattractive.