Source:
NYTimesDecember 15, 2009
Citigroup Has Reached a Deal to Repay U.S. Bailout Funds
By ERIC DASH and JEFF ZELENY
Citigroup reached a deal early Monday morning to be the last of the big Wall Street banks to exit the government’s bailout program, after persuading regulators that it was sound enough to stand on its own.
Citigroup announced a broad program that will replace the $20 billion of remaining bailout aid with money from private investors, facilitate the sale of the government’s $25 billion in bank stock and allow it to wean itself off other forms of federal assistance.
To help replenish its coffers, Citigroup expects to raise about $17 billion by selling stock as early as this week and issue up to $7.2 billion in other capital by the first quarter of next year. The moves will leave the bank with one of the largest capital cushions of the major banks, assuaging regulators’ concerns about its ability to weather another severe downturn without returning to the government for help. The plan also should help Citigroup shed the stigma that came with accepting bailout money and remove the harsh compensation restrictions imposed on banks that received multiple bailouts.
“We are pleased to be able to repay the U.S. government’s trust preferred securities and to terminate the loss-sharing agreement,” the chief executive, Vikram S. Pandit, said in a statement. “We owe the American taxpayers a debt of gratitude."
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http://www.nytimes.com/2009/12/15/business/economy/15bank.html?_r=1&ref=global-home
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