Citi public exchange offer gets 99 percent shares

金牛银熊

NEW YORK (Reuters) - Citigroup Inc (NYSE:C - News) said on Sunday some 99 percent of its stock was tendered in an exchange offer for publicly held securities, in a key step toward giving the U.S. government a 34 percent equity stake in the bank.

Citigroup said preliminary results showed about $20.3 billion worth of publicly held convertible and nonconvertible preferred and trust preferred securities were tendered in the exchange offer.

The bank will issue 5.83 billion common shares to the public exchange offer participants, it said. The exchange offer expired at 5 p.m. New York time on Friday.

The New York-based lender has been conducting a series of exchange offers on $58 billion of securities, as part of a federal bailout designed to bolster the bank's capital.

Public and private investors are exchanging up to $33 billion of securities for common stock, while the government is exchanging up to $25 billion of its own securities.

Citigroup is conducting the exchange offers after heavy losses led to a series of federal bailouts, including $45 billion of taxpayer money, for the third-largest U.S. bank.

The bank is the most troubled of the nation's largest lenders, after credit losses and writedowns led to $37.5 billion of net losses in the 15 months ended in December.

Last week, Citigroup said private holders of $12.5 billion of convertible preferred securities agreed to swap them for securities expected to convert to common stock.

The government matched that by swapping $12.5 billion of its own nonconvertible preferred shares for the securities

The bank said on Sunday it expects to swap another $12.5 billion of its preferred stock with the government after the latest exchange offer.

dara

short term a not good thing for C.  those converted common shareholders' cost may be <$1.
After they sell, C may bottom.

Now it looks like buying the preferred shares and short common at $1.x was a genius idea. But I was wondering if anyone could really short a $1.x stock? While even w/o the short common hedge, buying preferred still got a huge return now.

polopolo

No, exchange was done at 3.25 per share

dara

No, exchange was done at 3.25 per share
polopolo 发表于 2009-7-27 15:51

It is not like that.

For example, you bought C preferred at 25 cents per dollar, which means you cost for citi common is 3.25 * 100 / 25 =  80 cents.

I saw that day Citi preferred was sold at 18 cents per dollar, I think the lowest was 13 cents per $1.  But by the end of that day its preferred quickly moved back a lot because lots of people got the tricks.

戒急用忍

但是，你要想到绝大部分holder是真金白银1dollar买1dollar,而且从头握到尾没有出手的。preferred security设计上都是为长期投资吃利息和分红。俺在去年买BAC的preferred security，都是20c换1刀，还有长年分红。（现在已经涨回大概8毛换一刀了），但成交量都是很小的。

戒急用忍

那些preferred在07年都是1.1块买1dollar甚至更高，因为有长年（达30年）7%的分红.

但是，你要想到绝大部分holder是真金白银1dollar买1dollar,而且从头握到尾没有出手的。preferred security设计上都是为长期投资吃利息和分红。俺在去年买BAC的preferred security，都是20c换1刀，还有长年分红。（现 ...
戒急用忍 发表于 2009-7-27 16:33

dara

但是，你要想到绝大部分holder是真金白银1dollar买1dollar,而且从头握到尾没有出手的。preferred security设计上都是为长期投资吃利息和分红。俺在去年买BAC的preferred security，都是20c换1刀，还有长年分红。（现 ...
戒急用忍 发表于 2009-7-27 17:33

During March, the vol was huge because any ppl was afraid that C could go BK.

新低手

During March, the vol was huge because any ppl was afraid that C could go BK.
dara 发表于 2009-7-27 18:19

sold to the public? i should buy several hundreds shares before