After FDIC Bump, Citi Plans To Raise Capital

Posted by Orb Staff on June 08, 2009 No Comments
Categories : Residential Mortgage

between the Federal Deposit Insurance Corp. (FDIC) and Citigroup over the company's financial health rating has been resolved, clearing the way for Citi to raise capital by way of converting preferred shares into common stock, [link=http://www.ft.com/cms/s/0/4b2f6266-5217-11de-b986-00144feabdc0.html?nclick_check=1][u]The Financial Times[/u][/link] reports. The conversation could take place as early as next week, according to the report, which cited people familiar with the matter. Citi delayed its attempt to raise capital because of talk that the company would land on a ‘problem lender’ list constructed by the FDIC. Regulators, meanwhile, say the delay was more due to internal complications at the company and to the normal regulatory reviews performed by agencies such as the Securities and Exchange Commission. Additionally, the Financial Times article suggests that the FDIC is pushing for a management makeover at Citi, with FDIC Chair Sheila Bair and other regulators advocating that CEO Vikram Pandit be replaced. SOURCE: Financial

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