Citadel's novel debt offering draws attention

In what has to be a first, Citadel, the big hedge fund operator, will issue bonds to the public and put the proceeds to work in its own investment portfolio. Apparently, there have been a few fund firms that have sold bonds privately. The move would offer some obvious benefits: Money raised via capital markets is not bound by margin requirements imposed by the investment banks that lend hedge funds money. This may work as long as the bond holders maintain a certain level of confidence that the firm remains sound. Recent rumors have held that the firm racked up some large losses on its energy investments.

For more on this:
- Here's an article from Financial Times via msnbc.com
- Remember Citadel acquired assets from Amaranth. Article