Nov 24, 2008
So Did You Really Expect They'd Do Anything Else?
"The US government rode to the rescue of Citigroup late Sunday, entering an agreement to backstop up to $306bn in problematic assets and injecting $20bn in capital to restore confidence in a bank that defines the term 'too big to fail.'
"The 11th-hour transaction, announced just before midnite Sunday, calls for Citi to absorb the first $29bn in losses it sustains from problematic assets, and for the federal government to stand behind as much as $277bn more.
"The arrangement also provides for the injection of $20bn in new capital to Citi, in return for which the bank will issue preferred shares to the government, paying dividends at a rate of 8 percent annually."
"The 11th-hour transaction, announced just before midnite Sunday, calls for Citi to absorb the first $29bn in losses it sustains from problematic assets, and for the federal government to stand behind as much as $277bn more.
"The arrangement also provides for the injection of $20bn in new capital to Citi, in return for which the bank will issue preferred shares to the government, paying dividends at a rate of 8 percent annually."