Citi Tries To Avoid U.S. Ownership
Citigroup, which is awaiting the release of its government stress test results this week, has been told by regulators that it won't need anymore taxpayer money, Bloomberg sources said. But the government is now looking at how much of their preferred stock, which they received after giving the bank $52 billion in bailout money, will be converted into common shares. The government already could convert up to $25 billion into common stock, which would give it a 36 percent ownership stake in the company, according to the terms of a February agreement.
Citigroup may be hoping that raising additional private capital will keep the U.S. from converting any of the remaining $27 billion into common stock – a move that would give them a controlling interest in the bank.
On Sunday, the Financial Times reported that Citigroup, along with Bank of America, is trying to convince government regulators that the stress tests paint an overly negative picture of their balance sheets.