Citigroup Inc., who is the recipient of the biggest U.S. bank bailout, has struck a deal with regulators for repaying $20 billion to taxpayers and in order to escape government-imposed pay restrictions.
Citibank will raise funds with a Sale of $20.5 billion of equity and debt
Citigroup, is the only major U.S. lender that is still dependent on the government “exceptional financial assistance. The bank said in a statement today that with a sale of $20.5 billion of equity and debt the company will raise the funds.
It has also been planned by the New York-based company that it will substitute “substantial common stock” for cash compensation.
Stock Sale
It has been decided by the bank that it will sell $17 billion of common stock, with a so- called over-allotment option of $2.55 billion, and $3.5 billion of “tangible equity units.” As much as $5 billion of common stock will be sell off by the U.S. Treasury. The treasury has planned to unload the rest of its stake during the next six to 12 months.
Citigroup’s Stock position in New York Trading
At 8:03 a.m., in New York trading Citigroup fell to $3.86, which is a drop down from its $3.95 close on Dec. 11. This year the stock has tumbled 41%, valuing the lender at about $90 billion.
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