30 April 2008

Citigroup Cashes Out

Seeking to bolster capital depleted by mounting losses, Citigroup the biggest U.S. bank, raised $4.5 billion in a stock sale, 50% more than it planned after "strong demand'' from investors. Companies normally try to avoid forced stock sales because they dilute the earnings power of current shareholders.

The biggest U.S. bank sold 178.1 million shares at a price of $25.27 each. Shares of the New York-based company fell 2.9% following the news. The sale represents about 3% of Citigroup's shares outstanding as of March 31.

All the world's biggest banks, grappling with more than $300 billion of losses on mortgages, bonds and loans, have sought new capital to stave off credit-rating downgrades that might jeopardise client relationships and access to financing.

Citigroup Increases Stock Offering to $4.5 Billion {Bloomberg}

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