» Business » Citi to repay $20 billion bailout fund

Citi to repay $20 billion bailout fund

Source: PTI
December 14, 2009 20:03 IST
Get Rediff News in your Inbox:

Citigroup on Monday said it will repay $20 billion bailout money to the US government, a move that will ease strict government regulations on the financial services provider.

Citi, which was among the severely hit by the financial turmoil, had received $45 billion from the government as part of the Troubled Asset Relief Programme (TARP), an initiative which mainly pumped in billions of dollars into battered companies. Vikram Pandit-led Citi has reached an agreement with the US authorities to payback $20 billion of TARP funds.

Citi would also terminate loss-sharing pact with the government. Citi has to pay back only $20 billion, since the government got a 34 per cent stake in Citi for $25 billion.

Citi would be the latest to exit TARP after Bank of America, which repaid bailout funds of $45 billion this month.

"Once Citi repays the $20 billion of TARP trust preferred securities and upon termination of the loss-sharing agreement, it will no longer be deemed to be a beneficiary of 'exceptional financial assistance' under TARP beginning in 2010," it said in a statement.

Citi would immediately issue $20.5 billion of capital and debts. These would include $17 billion of common stocks, with an over-allotment option of $2.55 billion.

Get Rediff News in your Inbox:
Source: PTI© Copyright 2021 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.

Moneywiz Live!