Citi nears completion of public exchange offer

Last Updated: Monday, July 27, 2009 - 18:17

New York: Banking behemoth Citigroup has
completed the public exchange of about USD 20.3 billion-worth
publicly held convertible and non-convertible preferred
securities, among others, into common shares, as part of its
efforts to bolster the capital.

The completion of the public exchange offer would take
the US government closer to owning 34 percent in the
financial services entity.

"Approximately USD 20.3 billion in aggregate liquidation
value of publicly held convertible and non-convertible
preferred and trust preferred securities were validly tendered
and not withdrawn in the exchange.

"This represents 99 percent of the total liquidation
value of securities that Citi was offering to exchange," Citi
said in a statement on Sunday.

Citi would offer nearly 5.8 billion common shares to the
participants of the public exchange offer.

One of the worst hit in the financial turmoil, Citi has
already fresh capital to the tune of USD 45 billion from the
US and the exchange offer is part of its measures to
strengthen the bank`s capital position.

Last week, the company announced the completion of
exchange offers worth USD 25 billion with the Federal
government and certain private holders of preferred

With the US government ready to match up to USD 12.5
billion of the total securities exchanged in the offer, Citi
said it expects to complete another exchange of preferred
securities worth USD 12.5 billion with the US.

Citi noted that once all the exchange offers are
complete, about USD 58 billion worth preferred securities
would be converted into common stocks.

"The successful completion of the exchange offers marks a
significant milestone for Citi," the firm`s chief executive
Vikram Pandit said.

"Citi will have approximately USD 100 billion of Tangible
Common Equity and a Tier 1 Common ratio of approximately nine
based on our June 30 results.

Following all these exchanges, Citi would boost its Tier
1 Common Equity by about USD 64 billion and its Tangible
Common Equity (TCE) by nearly USD 60 billion.

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First Published: Monday, July 27, 2009 - 18:17

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