WSJ: Citigroup-Government Stake Deal (40%) Could Come as Soon as Today

[Hissyspit]

Source: Wall Street Journal

Citigroup-Government Stake Deal Could Come As Soon As Today: Wall Street Journal

Wall Street Journal | February 26, 2009 02:23 PM

The Wall Street Journal is reporting that the government may take as much as a 40% stake in Citigroup today:

Citigroup Inc. is closing in on an agreement to boost the federal government's stake in the company to as much as 40%, according to people familiar with the situation. A deal could be announced as soon as Thursday.

But a greater U.S. stake will bring a slew of new complications for executives of the New York company.

- snip -

A representative of Citigroup was not immediately available for comment

Read more: http://www.huffingtonpost.com/2009/02/26/citigroup-nationalization_0_n_170296.html

[Frank Booth]

1. Looks like Citigroup's plan to screw us again worked.

Citigroup's Clever Plan to Shaft Taxpayers Again: http://finance.yahoo.com/tech-ticker/article/191028/Citigroup%27s-Clever-Plan-to-Screw-Taxpayers-Again

[No Elephants]

10. Only Congress and the White House have the power to shaft taxpayers, regardless of

what Citigroup does or wants.

[Pirate Smile]

2. U.S. Is Said to Agree to Raise Stake in Citigroup

Source: The New York Times

By ERIC DASH
Published: February 27, 2009

The Treasury Department reached a deal late Thursday to take a stake of 30 to 40 percent in Citigroup as part of a third bailout of the embattled bank, according to people close to the deal.

Vikram S. Pandit, the chief executive, will remain at the helm, but Citigroup will have to shake up its board so that it has a majority of independent directors, a move that federal regulators had already been pursuing.

Under the terms of the deal, the Treasury Department has agreed to convert a portion of its preferred stock investment in Citigroup into common stock.

It will convert its stake as long as Citigroup can persuade private investors, including several big government investment funds, to do so alongside of the government, one of the people close to the deal said.

The Treasury Department will match the private investors conversions dollar-for-dollar up to $25 billion. That accounts for uncertainty in how big the government’s stake will be.



Read more: http://www.nytimes.com/2009/02/27/business/27deal.html?hp

[babylonsister]

3. How dumb is this, or smart? Anyone know? nt

[Pirate Smile]

5. Don't know. AP has their version out now: Source: Gov't on verge of deal to aid Citigroup

Source: Gov't on verge of deal to aid Citigroup

WASHINGTON – The government is on the verge of closing a deal to significantly boost its ownership stake in Citigroup. In return, it will demand changes be made on the troubled banking giant's board and other conditions, according to a person with knowledge of the discussions.

The increased stake in Citigroup Inc. will not require additional money from taxpayers and the bank will still have to undergo a "stress test," such as those that banking regulators started conducting this week on the nation's biggest banks, said the source, who spoke on condition of anonymity because a deal hasn't been officially announced.

An announcement is anticipated later Friday.

The government would convert some of its preferred shares in Citigroup to common shares only if the bank can get private investors to do the same, the source said. If that were to happen, the government's stake in Citigroup could jump to 40 percent, from less than 8 percent now, the source said.

The New York-based bank already has received $45 billion in U.S. bailout money made up primarily of debt-like preferred shares, and it has received federal guarantees to cover losses on some $300 billion in risky investments.

Converting the shares of preferred to common stock would help bring Citigroup closer to the mix of capital that the government will want to see when it conducts the stress tests.

http://news.yahoo.com/s/ap/20090227/ap_on_bi_ge/citigroup_rescue;_ylt=Au5gPDmCnGj9kz37WVX4Up2yBhIF

[babylonsister]

6. If they have a reason, I hope they share. I'm

clueless about money, except our own, but what's going on?

[girl gone mad]

8. It's not as bad as it could have been,

but it's still pretty bad.

http://baselinescenario.com/2009/02/26/convertible-preferred-stock-capital-assistance-program/

[leftstreet]

4. Pet Rocks died. Why can't ShitiGroup. n/t

[mackerel]

7. This "too big too fail" mantra is getting old.

[No Elephants]

9. Yep. If they had kept limits on monopolies in place--or at least restored them after Raygun left

office--we would not have so many entities that are "too big to fail."

Where is good ole "trust busting" Teddy Roosevelt when you really need him?

Republicans pretend to revere TR and Honest Abe, even as they run away from them double time. My real problem is that, somewhere along the line, the Democrats started running with them. Now, we're all screwn.

I am so sick to my stomach right now.

And we wee scared that McCain would be Bush's third term. How adorably naive are we?

Well, at least we've achieved unity. Now we're all in for big business AND for big government.

Worst of both worlds. Whooptie do.