CEO Vikram Pandit said in a statement, "This securities exchange has
one goal -- to increase our tangible common equity (TCE). While we
believe Tier 1 capital remains the most important measure of the
financial strength of banks, we recognize that the markets also view
Tangible Common Equity as an important measure."
Citi is offering to exchange:
- Interim securities and warrants for privately held convertible preferred securities;
- interim securities and warrants for U.S. government-held preferred securities; and
- common stock for publicly held convertible and nonconvertible preferred securities.
Citi will offer to exchange up to $27.5 billion of its
existing preferred stock held by private investors at a conversion
price of $3.25 per share,
a 32% premium over Thursday's closing price of $2.46.
The
Government of Singapore Investment Corp. Pte. Ltd., Saudi Arabian
Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, Capital Research Global
Investors, Capital World Investors and other investors have said they
will participate in the exchange.
Citi also announced a fourth quarter goodwill
impairment of $9.6 billion, while chairman
Richard Parsons said he has reached the next step in restructuring the board. -
Baz Hiralal
Citigroup Inc. (NYSE:C) said its deal with Uncle Sam will not require additional taxpayer money and could increase the government's stake by 28%. The government now holds about 8%. 
