Citi to Exceed Targeted Capital Ratios Pro Forma for Fourth Quarter 2007; Nearly $30 Billion of Capital Raised or Priced Over Last 2 Months
NEW YORK – Citi said today that it will exceed its announced targeted capital ratios on a pro forma basis for the fourth quarter 2007.
Taking into account recent capital raising activities totaling almost $30 billion, Citi expects its following key capital ratios to hit, on a pro forma basis for the fourth quarter: Tier One at approximately 8.8% and TCE/RWMA capital ratio at approximately 6.9%.
“These levels meaningfully exceed our capital ratio targets,” said Vikram Pandit, Chief Executive Officer, Citi. “We wanted to make sure that we can put capital to work for our clients and capture market opportunities for our shareholders.”
Citi priced a series of equity issuances last week, including a $12.5 billion private placement of Convertible Preferred securities, a $2.9 billion public offering of Convertible Preferred securities, and a $3.25 billion public offering of Straight Preferred securities. The cumulative $18.65 billion equity issuance has been priced as follows:
* $12.5 billion private placement of Convertible Preferred securities with a 7% non-cumulative dividend and a $31.62 per share conversion price
* $2.9 billion public offering of Convertible Preferred securities with 6.5% non-cumulative dividend and a conversion price of $33.73 per share
* $3.25 billion public offering of Straight Preferred securities with non-cumulative dividend of 8.125%
These private and public Convertible Preferred securities offerings will settle and close on January 23, 2008. The Straight Preferred securities offering will settle and close on January 25, 2008.
In December, Citi sold $7.5 billion of Upper DECS Equity Units in a private placement to the Abu Dhabi Investment Authority. As a result of the pricing of the $12.5 billion private offering and as contractually required, the maximum conversion price on the Upper DECS Equity Units will be reduced to $31.83. All other features of the Upper DECS Equity Units will remain the same, including the reference price of $31.83 and payment rate of 11%. The sale of the Upper DECS Equity Units settled and closed on December 3.
On December 21, Citi closed and settled on $3.5 billion public offering of Enhanced Trups. These securities bear an 8.30% coupon.
On November 27, 2007, Citi also closed and settled on a $787.5 million public offering of Enhanced Trups. These securities bear a 7.875% coupon.
On January 18, 2008, Citi announced that Nikko Cordial Corporation shareholders will be entitled to receive 0.602 shares of Citigroup Inc. common stock for each share of Nikko Cordial Corporation common stock that they own under the previously agreed share exchange between Citi and Nikko Cordial. The share exchange will settle on January 29, 2008.
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