Citigroup in Exchange Offers Totalling Approximately $58 Billion
August 13, 2009
Cleary Gottlieb represented Citigroup in a series of public and private exchange offers, marking a significant milestone for Citi in its recovery from the financial crisis. In aggregate, approximately $58 billion of preferred and trust preferred securities have been exchanged for common stock.
In the public exchange offers, public holders of approximately $20.3 billion of convertible and non-convertible preferred stock and trust preferred securities tendered to exchange their securities for common stock, representing 99% of the total liquidation value of securities that Citi was offering to exchange. In addition, Citi completed a U.S. Government exchange of $25 billion of preferred stock and a private exchange of $12.5 billion of preferred stock. Citi also exchanged the U.S. Government’s $20.1 billion of remaining preferred stock for new trust preferred securities. As a result of these exchanges, Citi will increase its Tier 1 Common by approximately $64 billion and its Tangible Common Equity by approximately $60 billion.
The exchange offers were first announced in late February of this year, and required the execution of exchange agreements with two U.S. Government entities and a number of private investors in Citi, as well as the filing of a registration statement for the public exchange offers and two proxy statements for shareholder approvals of amendments to Citi’s charter.
Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management.