Tuesday, January 25, 2011

Treasury Announces Sale Of 465 Million Citigroup Warrants

Video inside of Geithner with Charlie Rose.

Editor's Note: Please see our story from last week on Citigroup profit and bonus.

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Here's some background from last week's Treasury press release on tomorrow's auction of Citigroup warrants.

Source - Treasury.gov

WASHINGTON - The U.S. Department of the Treasury today announced its intention to dispose of certain warrant positions received in consideration for investments made under the Capital Purchase Program (CPP), the Targeted Investment Program (TIP) and as part of a loss-sharing agreement. During the current quarter, Treasury intends to conduct auctions to sell its warrant positions in Citigroup Inc., Boston Private Financial Holdings, Inc., and Wintrust Financial Corporation.

Apart from the warrants, Treasury has fully sold all other securities issued to it by Citigroup Inc., and each of the other financial institutions has fully repurchased Treasury´s preferred stock investment. The warrant sales anticipated during the current quarter, if consummated in full, would represent Treasury´s disposition of its remaining holdings in these financial institutions. The proceeds of these sales will provide an additional return to the American taxpayer from Treasury´s investments in these financial institutions beyond the dividend payments it received on the related preferred stock.

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Now the details from today's press release...

Treasury Department Announces Public Offerings of Warrants to Purchase Common Stock of Citigroup

Source - Treasury.gov

WASHINGTON -- The U.S. Department of the Treasury today announced that it has commenced a secondary public offering of 255,033,142 warrants to purchase the common stock of Citigroup Inc. (the “Company”) (the “A Warrants”) and a secondary public offering of 210,084,034 warrants to purchase the common stock of the Company (the “B Warrants”). The proceeds of this sale will provide an additional return to the American taxpayer from Treasury’s investment in the Company beyond the dividend payments it received on the related preferred stock and the profit received from the sale of shares of common stock and trust preferred securities of the Company. The offerings are expected to price through a modified Dutch auction. Deutsche Bank Securities Inc. is the sole book-running manager and Cabrera Capital Markets, LLC and Loop Capital Markets LLC are the co-managers for the offerings.

Deutsche Bank Securities Inc., in its capacity as auction agent, has specified that the auctions will commence at 8:00 a.m., Eastern Time, on January 25, 2011, and will close at 6:30 p.m., Eastern Time, on that same day (the “submission deadline”). During the auction period, potential bidders for the A Warrants will be able to place bids at any price (in increments of $0.01) at or above the minimum bid price of $0.60 per warrant, and potential bidders for the B Warrants will be able to place bids at any price (in increments of $0.01) at or above the minimum bid price of $0.15 per warrant.

The warrants are being offered pursuant to an effective shelf registration statement that has been filed by the Company with the Securities and Exchange Commission (the “SEC”). Preliminary prospectus supplements related to the offerings will be filed by the Company with the SEC and will be available on the SEC’s website at http://www.sec.gov. Copies of the final prospectus supplements relating to these securities may be obtained, when available, from Deutsche Bank Securities Inc., Prospectus Department, Harborside Financial Center, 100 Plaza One, Jersey City, New Jersey 07311-3988, telephone: 1-800-503-4611 begin_of_the_skype_highlighting 1-800-503-4611 end_of_the_skype_highlighting, or by emailing prospectus.cpdg@db.com.

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And quick coverage from Marketwatch...

The offerings are expected to price through a modified Dutch auction held on Tuesday. In a press release, Treasury said it will sell one tranche of 255.03 million warrants at a mininum bid price of $0.60 per warrant and a second tranche of 210.08 million warrants for a minimum bid price of $0.15 per warrant. Deutsche Bank Securities Inc is the sole book-running manager for the auctions. The proceeds of the sale will provide an additional return to taxpayers from Treasury's investment in Citigroup to keep the bank holding company from collapsing. Treasury sold the last of its Citigroup common shares in December.

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Video - Geithner on Charlie Rose - July 22, 2010

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Geithner's 2 appearances on Charlie Rose in 2010...


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