Headline Alert
TARP Update: Citi Reaches Agreement to Repay TARP
In an effort to reduce government influence, Citi (C) is getting out from under the TARP program. Citi and U.S. Government have agreed on terms for the company to repay the $20B the government holds in TARP. Citi will immediately issue $20.5B of capital and debt.
Citi will raise $17B of common stock and $3.5B of tangible equity units and approximately $0.7B of subordinated notes.
In connection with the stock offering, the U.S. Treasury will sell up to $5B of the common stock it holds in a concurrent secondary offering.
The Treasury has also announced that it plans to sell the remainder of its shares in an orderly fashion over the next 6-12 months.
According to StreetAccount, the repayment will result in an approximate $8B pre-tax loss. Citi will also terminate the loss-sharing agreement with the government
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