Citigroup's effort to sell, OneMain, a lender that offers home equity and personal loans to risky borrowers, has collapsed,  a victim of  wobbly markets and a lackluster economy.  Both Citi and its bidders which included the private equity firms Centerbridge Capital Partners and Leucadia National, concluded that it would be difficult to finance the business.  To do so, the firms would have had to bundle new loans and sell them as securities to investors.  The securitization market for private loans has been scare since the crisis, however, as investors have balked at the risk attached to such products.

Citi was attempting to sell the firm as part of its effort to shed noncore businesses in the aftermath of the financial crisis.  Since OneMain remains profitable, the bank is likely to put the unit on the block again when the markets regain stability.  [Dealbook 1/6/12]