Citigroup Inc. will have more than $300 billion of troubled mortgages and other assets guaranteed by the US government under a federal plan to stabilize the lender after its stock fell 60% last week, Bloomberg reports.
Citigroup also will get a $20 billion cash infusion from the Treasury Department, adding to the $25 billion the bank received last month under the Troubled Asset Relief Program. In return for the cash and guarantees, the government will get $27 billion of preferred shares paying an 8% dividend.
The Treasury, Federal Reserve and Federal Deposit Insurance Corp. says that the move aims to bolster financial-market stability and restore economic growth. The decision came after New York-based Citigroups tumbling share price sparked concern that nervous depositors might pull their money and destabilize the company, which has $2 trillion of assets and operations in more than 100 countries.
The full story is available at the Bloomberg’s web-site.
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