Citigroup begins $58 billion stock swap

Citigroup begins $58 billion stock swap
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First Published: Wed, Jun 10 2009. 05 44 PM IST
Updated: Wed, Jun 10 2009. 05 44 PM IST
New York: Citigroup Inc on Wednesday began a long-delayed $58 billion stock swap that could leave the government with a 34% stake in the nation’s third-largest bank.
Citigroup plans to swap common stock for as much as $33 billion of preferred shares, and convert as much as $25 billion of preferred shares held by the US Treasury into common stock.
Citigroup said the swap could make it one of the world’s best-capitalized banks, adding up to $61 billion of tangible common equity and $64 billion of Tier-1 common equity. It had planned to begin the swap in April.
The exchange offer could result in the issuance of more than 17 billion new common shares, diluting the holdings of existing investors by 76%. The public exchange offers expire 24 July.
Citigroup shares closed Tuesday at $3.41.
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First Published: Wed, Jun 10 2009. 05 44 PM IST
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