Bloomberg
U.S. Treasury to Sell 1.5 Billion Shares of Citigroup Stock
April 26, 2010, 7:34 AM EDT
By Rebecca Christie
April 26 (Bloomberg) -- The U.S. Treasury Department plans to sell “up to” 1.5 billion shares of Citigroup Inc. in the government’s biggest step yet to exit the 27 percent ownership of the bank it rescued during the financial crisis.
The Treasury will give its agent, Morgan Stanley, “discretionary authority” to sell the amount, and expects to give clearance to sell additional shares thereafter, the department said in an e-mailed statement today. “Treasury will begin selling its common shares in the market in an orderly fashion under a pre-arranged written trading plan.”
The deal is part of a goal announced last month of selling about 7.7 billion shares the government received as part of New York-based Citigroup’s participation in the $700 billion Troubled Asset Relief Program. President Barack Obama is aiming to recoup “every single dime” of taxpayer money from the TARP fund after popular opposition to the Wall Street bailout.
“We’re putting TARP out of its misery,” Treasury Secretary Timothy F. Geithner said in an interview with CNN television aired yesterday. “This is going to cost us much less in fiscal terms than even the S&L crisis,” he said, referring to the collapse of savings and loan banks in the 1980s and 1990s.
Geithner said the government is withdrawing from the financial industry after forcing lenders to “recapitalize with private money.”
SEC Filing
Citigroup has filed a prospectus supplement on the sale with the Securities and Exchange Commission, the Treasury said in today’s statement. The department received the shares last year in exchange for $25 billion in preferred stock, at a price of $3.25 per common share. Citigroup closed at $4.86 on the New York Stock Exchange on April 23.
Citigroup Chief Executive Officer Vikram Pandit said on April 20 at the bank’s annual shareholder meeting that he felt “a whole lot better” than he did a year ago and maintained that the bank is “positioned for growth.”
The 1.5 billion share sale will be done under “certain parameters,” the Treasury said. The offering will be made only by means of a prospectus, and the government required Morgan Stanley to provide “opportunities for participation by small broker-dealers, including minority or women-owned broker dealers,” the statement said.
The sale doesn’t cover the Treasury’s holdings of Citigroup trust preferred securities or warrants for its common stock, which will be disposed of separately, the department said.
The Treasury said copies of the prospectus supplement and accompanying prospectus relating to the offering may be obtained by emailing prospectus@morganstanley.com, by calling toll-free in the United States 1-866-718-1649 and from the following address: Morgan Stanley & Co. Incorporated, Attn: Prospectus Department, 180 Varick Street, New York, NY 10014.
Small and minority-owned dealers interested in participating in the offering may contact Morgan Stanley at ustdisposition@morganstanley.com by 5:00 p.m. New York time on April 27 for further information, the Treasury said.
--Editors: Chris Anstey, Paul Panckhurstmg
U.S. Treasury to Sell 1.5 Billion Shares of Citigroup Stock
April 26, 2010, 7:34 AM EDT
By Rebecca Christie
April 26 (Bloomberg) -- The U.S. Treasury Department plans to sell “up to” 1.5 billion shares of Citigroup Inc. in the government’s biggest step yet to exit the 27 percent ownership of the bank it rescued during the financial crisis.
The Treasury will give its agent, Morgan Stanley, “discretionary authority” to sell the amount, and expects to give clearance to sell additional shares thereafter, the department said in an e-mailed statement today. “Treasury will begin selling its common shares in the market in an orderly fashion under a pre-arranged written trading plan.”
The deal is part of a goal announced last month of selling about 7.7 billion shares the government received as part of New York-based Citigroup’s participation in the $700 billion Troubled Asset Relief Program. President Barack Obama is aiming to recoup “every single dime” of taxpayer money from the TARP fund after popular opposition to the Wall Street bailout.
“We’re putting TARP out of its misery,” Treasury Secretary Timothy F. Geithner said in an interview with CNN television aired yesterday. “This is going to cost us much less in fiscal terms than even the S&L crisis,” he said, referring to the collapse of savings and loan banks in the 1980s and 1990s.
Geithner said the government is withdrawing from the financial industry after forcing lenders to “recapitalize with private money.”
SEC Filing
Citigroup has filed a prospectus supplement on the sale with the Securities and Exchange Commission, the Treasury said in today’s statement. The department received the shares last year in exchange for $25 billion in preferred stock, at a price of $3.25 per common share. Citigroup closed at $4.86 on the New York Stock Exchange on April 23.
Citigroup Chief Executive Officer Vikram Pandit said on April 20 at the bank’s annual shareholder meeting that he felt “a whole lot better” than he did a year ago and maintained that the bank is “positioned for growth.”
The 1.5 billion share sale will be done under “certain parameters,” the Treasury said. The offering will be made only by means of a prospectus, and the government required Morgan Stanley to provide “opportunities for participation by small broker-dealers, including minority or women-owned broker dealers,” the statement said.
The sale doesn’t cover the Treasury’s holdings of Citigroup trust preferred securities or warrants for its common stock, which will be disposed of separately, the department said.
The Treasury said copies of the prospectus supplement and accompanying prospectus relating to the offering may be obtained by emailing prospectus@morganstanley.com, by calling toll-free in the United States 1-866-718-1649 and from the following address: Morgan Stanley & Co. Incorporated, Attn: Prospectus Department, 180 Varick Street, New York, NY 10014.
Small and minority-owned dealers interested in participating in the offering may contact Morgan Stanley at ustdisposition@morganstanley.com by 5:00 p.m. New York time on April 27 for further information, the Treasury said.
--Editors: Chris Anstey, Paul Panckhurstmg