Citi to make $3.5 billion available to SIVsBank will provide capital facility to six of seven investment vehicles to help maintain credit ratings.NEW YORK (CNNMoney.com) -- Citigroup said Tuesday it plans to make about $3.5 billion in capital available to its structured investment vehicles, or SIVs, in an effort to maintain the rating on their senior debt. A company spokesman told CNNMoney.com that the facility had not been drawn upon, but would be available to six of the seven SIVs should the value of the junior notes approach zero. Citigroup (C, Fortune 500) moved its SIVs onto the company's balance sheet in December in order to protect their credit ratings and to give them time to sell their assets. At the time, the company's seven SIVs had about $49 billion in assets. Citigroup was among a group of banks, including JPMorgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500), that were planning to establish a bailout fund for their SIVs. The investment vehicles typically issued debt in the commercial paper market, becoming a key source for short-term financing, the proceeds of which were used to buy higher-yielding, long-term assets such as mortgage-backed securities. But instead of creating a "Super SIV," the banks developed individual solutions, including selling assets or finding other sources of liquidity. |
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