NEW YORK, June 10 (Reuters) - Citigroup Inc on Wednesday began a long-delayed $58 billion stock swap that could leave the government with a 34 percent stake in the nation's third-largest bank.
Citigroup plans to swap common stock for as much as $33 billion of preferred shares, and convert as much as $25 billion of preferred shares held by the U.S. Treasury into common stock.
Citigroup said the swap could make it one of the world's best-capitalized banks, adding up to $61 billion of tangible common equity and $64 billion of Tier-1 common equity. It had planned to begin the swap in April.
The exchange offer could result in the issuance of more than 17 billion new common shares, diluting the holdings of existing investors by 76 percent. The public exchange offers expire July 24.
Citigroup shares closed Tuesday at $3.41.
(Reporting by Jonathan Stempel; editing by John Wallace)
((jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net)) Keywords: CITIGROUP/SWAP (Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Citigroup plans to swap common stock for as much as $33 billion of preferred shares, and convert as much as $25 billion of preferred shares held by the U.S. Treasury into common stock.
Citigroup said the swap could make it one of the world's best-capitalized banks, adding up to $61 billion of tangible common equity and $64 billion of Tier-1 common equity. It had planned to begin the swap in April.
The exchange offer could result in the issuance of more than 17 billion new common shares, diluting the holdings of existing investors by 76 percent. The public exchange offers expire July 24.
Citigroup shares closed Tuesday at $3.41.
(Reporting by Jonathan Stempel; editing by John Wallace)
((jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net)) Keywords: CITIGROUP/SWAP (Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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