Citi nears completion of public exchange offer
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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of publicly held convertible and non-convertible preferred and trust preferred securities were validly tendered and not withdrawn in the exchange.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 securities.

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.

Bureau Report

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

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