Hot on Facebook

Guy Buys $123 Safe on eBay, Finds $26,000 Inside Seller tries to get half the cash back, fails »

Citigroup to Repay $20B in TARP Loans

Will issue $17B in common stock to meet capital requirements

By Kevin Spak, Newser Staff

Posted Dec 14, 2009 6:19 AM CST | Updated Dec 14, 2009 7:51 AM CST

(Newser) – Citigroup and the US government have reached a deal that will allow the bank to repay $20 billion in TARP loans, after weeks of wrangling over the bank's health. Citi will raise $20.5 billion, $17 billion of it in common stock, the company said in a statement, a sign that the government's still worried about its cash reserves. At the same time, the government will sell $5 billion of the Citi common stock it currently holds, with the remainder of its 35% stake gradually sold off within the next 6-12 months.

The bank will issue another $1.7 billion in stock to employees, instead of cash bonuses. "We owe the American taxpayers a debt of gratitude," said CEO Vikram Pantit, "and recognize our obligation to support the economic recovery through lending and assistance to homeowners and other borrowers in need." The bank added that by Dec. 31 it will have paid $3.1 billion in dividends and interest to the government.

In this Feb. 11, 2009 file photo, Citigroup CEO Vikram Pandit, right, accompanied by Morgan Stanley Chairman and CEO John Mack, testifies on Capitol Hill in Washington. (AP Photo/Manuel Balce Ceneta, file)

In this Feb. 23, 2009 file photo, Citigroup Center is seen in New York. (AP Photo/Seth Wenig, File)

« Prev« Prev | Next »Next » Slideshow

CLICK BELOW TO VOTE

50%

To report an error on this story, notify our editors.

More Newser Stories

Taxpayers Will Score $12B on Citigroup Bailout: Treasury

Government strikes deal to sell remaining 2.4B shares

(NEWSER) - Taxpayers will wind up making out like bandits on their $45 billion bailout of Citigroup. The Treasury Department has struck a deal to sell its remaining 2.4 billion shares of Citigroup for $4.35 a share, it announced yesterday, bringing the total money made off such sales to $57 billion. Citigroup will pay the underwriting fees on the sale. More»

Feds Look to Unload Citi Stake, Collect $8B

Dumping 27% stake would be 2nd-largest offering ever

(NEWSER) - At the time, throwing scads of cash at crumbling banks looked risky. But now it's financial genius as the Obama administration looks to unload its stake in Citigroup—and collect a tidy $8 billion profit in doing so. The transaction, which the Washington Post reports will be the second-largest stock offering ever, will cut nearly all TARP ties between Citi and the government, which holds a 27% stake. More»

To Spur Bank Execs to Act, Mess With Their Pay

Compensation limits have prompted swift TARP repayment

(NEWSER) - A common complaint about the TARP bailouts was that by injecting capital and making the financial environment more friendly, the government wasn't doing enough to push the banks into real reform. Why wouldn't the banks simply live off TARP cash as long as they could? Yet those concerns were unfounded, writes Daniel Gross, because it turned out the government did have an effective motivator: limits on compensation. More»

Citi Wins Massive Tax Break

Firm will use dodged fed taxes to repay fed bailout bucks

(NEWSER) - The government will be collecting billions of dollars less in taxes from Citigroup as part of Citigroup's deal to pay back federal bailout money. The IRS has granted an exemption from tax rules relating to Citigroup and other companies partially owned by the government. The future taxes being forfeited will likely amount to several billion dollars, accounting experts tell the Washington Post. More»

Citi, Wells Fargo Clash With Feds Over Repaying TARP

Fed, Treasury want banks to raise more capital first

(NEWSER) - Citigroup and Wells Fargo are at odds with the government over how much they need to raise to repay their TARP bailouts, with Uncle Sam wanting them to raise more capital first. Both are looking to follow Bank of America’s lead and get out from under the TARP, allowing them to escape federal scrutiny of executive compensation, but they’ve been told to raise more relative to what they’re repaying than BofA did, the Wall Street Journal reports. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Citigroup to Repay $20B in TARP Loans

Will issue $17B in common stock to meet capital requirements

OTHER STORIES ON OUR RADAR

Citigroup • Treasury Department • Vikram Pandit • bailout • financial crisis • Wall Street bailout • TARP • TARP repayment

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Taxpayers Will Score $12B on Citigroup Bailout: Treasury

Government strikes deal to sell remaining 2.4B shares

Feds Look to Unload Citi Stake, Collect $8B

Dumping 27% stake would be 2nd-largest offering ever

To Spur Bank Execs to Act, Mess With Their Pay

Compensation limits have prompted swift TARP repayment

Citi Wins Massive Tax Break

Firm will use dodged fed taxes to repay fed bailout bucks

Citi, Wells Fargo Clash With Feds Over Repaying TARP

Fed, Treasury want banks to raise more capital first

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?

Citigroup to Repay $20B in TARP Loans

Will issue $17B in common stock to meet capital requirements

Bookmark & Share

OTHER STORIES ON OUR RADAR

Citigroup • Treasury Department • Vikram Pandit • bailout • financial crisis • Wall Street bailout • TARP • TARP repayment

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Taxpayers Will Score $12B on Citigroup Bailout: Treasury

Government strikes deal to sell remaining 2.4B shares

Feds Look to Unload Citi Stake, Collect $8B

Dumping 27% stake would be 2nd-largest offering ever

To Spur Bank Execs to Act, Mess With Their Pay

Compensation limits have prompted swift TARP repayment

Citi Wins Massive Tax Break

Firm will use dodged fed taxes to repay fed bailout bucks

Citi, Wells Fargo Clash With Feds Over Repaying TARP

Fed, Treasury want banks to raise more capital first

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?