Citigroup gets deal with government
Associated Press
NEW YORK — Citigroup Inc. said today it reached a deal that will give the government up to a 36 percent stake in the bank.
The government, along with other private investors, will convert some of its preferred stock in Citi to common shares.
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 percent premium over Thursday’s closing price of $2.46. The government will match up to $25 billion of preferred stock it currently owns for conversion at the same price.
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The conversion will provide Citi the capital to withstand more economic weakening.
