Citadel Is Getting Bonded

The big hedge fund plans to sell bonds to raise funds.
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Citadel Investments, a big $12 billion hedge fund, is looking to raise funds through a bond sale.

The Chicago hedge fund could sell up to $500 million in bonds in an offering to be rated by FitchRatings. The bonds will be sold in an deal that is being managed by

Goldman Sachs

(GS) - Get Report

and

Lehman Brothers

(LEH)

.

It's unusual for hedge funds to raise money through the sale of bonds. Typically, hedge fund raise money by taking out loans from a Wall Street firm or a big commercial bank.

But hedge funds are beginning to look to the capital markets as way to raise financing.

Earlier this month, Fortress Investments, a $26 billion hedge fund and private equity outfit, became the first U.S. hedge fund to file for an IPO. Fortress is looking to raise $750 million in the initial public offering.