Credit Card News

Feds to say Goodbye to Citi


Feds to say Goodbye to Citi

On Monday of this week the Treasury Department announced that it is planning to sell off $2.4 billion of Citi’s shares as part of an underwritten offering.

The expected timing or possible price was not disclosed other than “completion of the offering would depend on whether it receives an acceptable price for the shares.” But it is expected that American taxpayers will be richer because they will be free of Citi.

The equivalent of $3.25 per share was paid by the government, although Citi shares have recently been trading at more than a dollar more than that, and this will no doubt give the Feds a price they are happy with.

The sale of Citi’s remaining shares should go straight towards the Governments bottom line, as those in the know of the deal reckon that the Feds are definitely in the black on the investment on Citi with interest on loans, dividend payments and stock sales.

The University of Louisiana’s assistant finance professor, Linus Wilson, stated that “Selling off the remaining stake ensures that taxpayers will book a healthy profit on their Citigroup investment,” which is positive news for all those involved.

With the Federal Reserve’s crisis lending details being newly released and bringing policymakers a bailout beating, the announcement couldn’t come at a better time.

Although it’s true to say that the bank bailouts weren’t as costly as what was first expected or suggested, they are still extremely unpopular because of being unable to hold some of the major crisis players accountable for their actions.

The announcement also comes less than a year after the government and Citi came to an agreement which enabled a way for the enormous bailout package that the government provided among the worst financial days of 2008 and the beginning of 2009, to be repaid by Citi. The same deal gave the Federal Reserve a deadline, which is up next week, in order to complete their sales on shares.

$45 billion was given by the government during the crisis in Troubled Asset Relief Program. The deal last December, as well as one reached earlier on in 2009 which was aimed at converting the majority of the governments TARP, had the Feds left with 7.7 billion shares, representing a 27% stake, of Citi.

But there is a definite light at the end of the financial tunnel. Wilson further stated “I am glad that the U.S. Treasury has taken steps today to keep its promises to Citigroup’s investors and managers sell taxpayers’ stake by December 14, 2010.” And he’s surely not alone.

Similar Credit Card News:










Copyright © 2020 | Image: Not posted | Categories: Credit Card News


Add a Comment




Home | RSS Feeds | Terms | Sitemap | Contacts Copyright © 2020 - CreditCardsCo™ - All rights reserved.

CreditCardsCo Disclaimer