An American Airlines’ Embraer E175LR (front), an American Airlines’ Boeing 737 (C) and an American Airlines’ Boeing 737 are seen parked at LaGuardia Airport in Queens, New York on May 24, 2024.
Charly Triballeau | AFP | Getty Images
American Airlines is in talks to make Citigroup its exclusive credit card partner, dropping rival issuer Barclays from a partnership that dates back to the airline’s 2013 takeover of US Airways, said people with knowledge of the negotiations.
American has been working with banks and card networks on a new long-term deal for months with the aim of consolidating its business with a single issuer to boost the revenue haul from its loyalty program, according to the people.
Talks are ongoing, and the timing of an agreement, which would be subject to regulatory approval, is unknown, said the people, who declined to be identified speaking about a confidential process.
Banks’ co-brand deals with airlines, retailers and hotel chains are some of the most hotly contested negotiations in the industry. While they give the issuing bank a captive audience of millions of loyal customers who spend billions of dollars a year, the details of the arrangements can make a huge difference in how profitable it is for either party.
Big brands have been driving harder bargains in recent years, demanding a bigger slice of revenue from interest and fees, for example. Meanwhile, banks have been pushing back or exiting the space entirely, saying that rising card losses, scrutiny from the Consumer Financial Protection Bureau and higher capital costs make for tight margins.
Airlines rely on card programs to help them stay afloat, earning billions of dollars a year from banks in exchange for miles that customers earn when they use their cards. Those partnerships were crucial during the pandemic, when travel demand dried up but consumers kept spending and earning miles on their cards. Carriers have said growth in card spending has far exceeded that of passenger revenue in recent years.
While it says it has the largest loyalty program, American was out-earned by Delta there, which made nearly $7 billion in payments from its American Express card partnership last year, compared with $5.2 billion for American.
“We continue to work with all of our partners, including our co-branded credit card partners, to explore opportunities to improve the products and services we provide our mutual customers and bring even more value to the AAdvantage program,” American said in a statement.
Delays, regulatory risk
It’s still possible that objections from U.S. regulators, including the Department of Transportation, could further delay or even scuttle a contract between American Airlines and Citigroup, leaving the current arrangement that includes Barclays intact, according to one of the people familiar with the process.
If the deal between American and Citigroup is consummated, it would end an unusual partnership in the credit card world.
Most brands settle with a single issuer, but when American merged with US Airways in 2013, it kept longtime issuer Citigroup on board and added US Airways’ card partner Barclays.
American renewed both relationships in 2016, giving each bank specific channels to market their cards. Citi was allowed to pitch its cards online, via direct mail and airport lounges, while Barclays was relegated to on-flight solicitations.
‘Actively working’
When the relationship came up for renewal again in the past year, Citigroup had good footing to prevail over the smaller Barclays.
Run by CEO Jane Fraser since 2021, Citigroup has the more profitable side of the AA business; their customers tend to spend far more and have lower default rates than Barclays customers, one of the people said.
Any renewal contract is likely to be seven to 10 years in length, which would give Citigroup time to recoup the costs of porting over Barclays customers and other investments it would need to make, this person said. Banks tend to earn most of the money from these arrangements in the back half of the deals.
With this and other large partnerships, Fraser has been pushing Citigroup to aim bigger in a bid to improve the profitability of the card business, said the people familiar.
“We are always actively working with our partners, including American Airlines, to look for ways to jointly enhance customer products and drive shared value and growth,” a Citigroup spokesperson told CNBC.
Meanwhile, Barclays executives told investors earlier this year that they aimed to diversify their co-branded card portfolio away from airlines, for instance, through added partnerships with retailers and tech companies.
Fixed-income markets recorded significant re-pricing during the week ending July 25, 2026, as a convergence of strong labor market metrics and surging energy costs drove U.S. Treasury yields higher across all maturities. The benchmark 10-year Treasury yield climbed toward 4.70%, reaching its highest point in several months. Institutional bond investors rapidly adjusted portfolio durations as expectations for near-term interest rate cuts by the Federal Reserve faded in response to inflation concerns.
The upward shift in sovereign yields reflects a broader fundamental reassessment of global monetary policy. Earlier in the quarter, money markets had priced in a series of rate reductions designed to support economic activity. However, with initial jobless claims falling to 187,000 and crude oil breaching $100 per barrel, fixed-income traders are pricing in a ‘higher-for-longer’ interest rate environment. The inversion between short-term Treasury bills and long-term bonds narrowed, indicating a shift toward term premium expansion.
Rising Treasury yields present both challenges and opportunities for institutional wealth managers. While commercial lenders and mortgage origination volumes face headwinds from elevated borrowing costs, fixed-income investors are locking in attractive real yields on high-quality sovereign and investment-grade corporate bonds. Institutional debt issuers, conversely, are recalibrating their capital structures, opting for shorter-term refinancing instruments or private credit facilities to avoid committing to elevated long-term coupon rates.
Navigating the current bond market landscape demands strict duration management and credit selection. Wealth advisors recommend maintaining flexible fixed-income allocations, combining short-duration Treasuries with inflation-protected securities (TIPS) to shield capital against potential energy-driven inflation spikes while earning dependable nominal income.
Private credit markets reached a pivotal milestone during the week ending July 25, 2026, as non-bank direct lending consortiums captured a record share of middle-market corporate debt originations. With commercial banks maintaining conservative credit standards and public bond yields remaining elevated, corporate borrowers are increasingly turning to private fund managers for customized capital solutions. This expansion marks a permanent structural shift in enterprise finance, establishing private credit as a primary pillar of institutional corporate liquidity.
The acceleration of private credit deals is driven by speed, deal certainty, and flexible terms. Unlike traditional syndicated bank loans that require lengthy underwriting, credit rating approvals, and public roadshows, private direct lenders can structure tailored financing packages within days. Middle-market firms facing upcoming debt maturities are utilizing private debt facilities to execute recapitalizations, strategic acquisitions, and growth capital deployments without risking execution delay in public markets.
However, financial regulators and central bank supervisors are scrutinizing the sector’s rapid growth. Supervisory agencies are evaluating potential systemic risks associated with non-bank leverage, valuation transparency, and liquidity mismatches during economic downturns. Despite regulatory interest, major pension funds, insurance firms, and sovereign wealth entities continue to expand capital allocations to private credit funds, attracted by reliable floating-rate yields that outperform public fixed-income benchmarks.
As private credit matures into a dominant asset class, corporate chief financial officers must evaluate non-bank lenders alongside traditional banking relationships. Direct lending partnerships provide valuable balance sheet resilience, enabling companies to secure flexible financing terms even during periods of public market turbulence.
The landscape of institutional debt markets is undergoing a profound structural shift on July 21, 2026, as major corporate issuers and commercial banks rapidly accelerate the deployment of tokenized debt instruments. Data published by leading capital market consortiums indicates that primary issuances of digital commercial paper and tokenized corporate bonds have reached record volumes this month. By moving legacy debt origination, underwriting, and secondary distribution onto permissioned distributed ledgers, corporate treasurers are unlocking unprecedented operational flexibility and instantaneous cross-border liquidity.
The adoption of tokenized debt is fundamentally altering how enterprise balance sheets manage short-term liquidity needs. Traditional corporate bond settlement cycles historically required multi-day clearing processes involving numerous intermediaries, custodial entities, and clearinghouses. Through programmable smart contracts on distributed ledgers, issuers can now execute atomic settlement—enabling continuous, 24/7 access to institutional capital pools. This instantaneous clearing mechanism drastically reduces counterparty risk, eliminates costly settlement friction, and allows treasury teams to dynamically optimize working capital in real time.
A major catalyst driving this institutional migration is the establishment of comprehensive digital asset regulatory frameworks across major financial hubs. Clear legal guidelines regarding ledger-based securities ownership have provided institutional compliance officers with the regulatory confidence necessary to transition multi-billion-dollar liquidity facilities onto digital platforms. Furthermore, the integration of automated regulatory reporting directly into token smart contracts simplifies ongoing compliance audits, ensuring that secondary market trades automatically enforce investor accreditation limits and tax withholding requirements.
For chief financial officers and institutional portfolio managers, tokenized debt represents a fundamental evolution in fixed-income strategy. Companies that embrace ledger-based debt structures gain direct access to a broader, global base of digital-native institutional investors while substantially reducing borrowing overhead. As ledger interoperability continues to improve across global exchanges, tokenized debt is poised to become the standard infrastructure for global corporate finance.
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