Citigroup to repay $20b of bailout
NEW YORK: Citigroup Inc reached an accord with the Treasury Department and regulators to repay $20 billion of the bailout it received from US taxpayers.
The lender will sell $20.5 billion of capital and debt, the New York-based bank said. The bank will sell $17 billion of common stock, with an over-allotment option of $2.55 billion, and $3.5 billion of tangible equity units. The US Treasury will concurrently sell as much as $5 billion of common stock it holds. The bank said it will also substitute "substantial common stock" for cash compensation.
Chief Executive Officer Vikram Pandit has pressed for an exit from the Troubled Asset Relief Program (TARP) to avoid being the only large bank left on "exceptional assistance", a Treasury designation reserved for companies including American International Group Inc and General Motors Corp that are surviving on taxpayer aid. Bank of America Corp exited last week after paying back $45 billion of bailout funds.
