Citibank prices equity offering at $20.5 billion

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- Citigroup said Wednesday it intends to raise $20.5 billion in the stock market as part of its plan to repay bailout money and free itself from government restrictions.

The New York-based lender said it will offer 5.4 billion shares of common stock priced at $3.15 per share. It will also offer 35 million "tangible equity units," which are are comprised of a prepaid stock purchase contract and a note, for $100 each.

The stock offering is expected to raise $17 billion, while the tangible equity units could bring in another $3.5 billion. Citi said the combined offering is the largest public equity offering in U.S. history.

Citigroup said it would no longer be considered a recipient of "exceptional financial assistance" under the Treasury Department's Troubled Asset Relief Program once the offering is complete and the loss-sharing agreement it has with the government is terminated.

That would free Citi from government imposed restraints on, among other things, executive compensation.

Citi also said that the Treasury, which holds a 34% stake in the bank, decided not to sell any of its shares in connection with the offering. The Treasury also extended the "lock-up period" on the sale of its 7.7 billion shares to 90 days from 45 days, Citi said.

Citigroup became one of the biggest recipients of bailout money last year after the government injected $45 billion into the company to help stabilize the embattled lender.

Concerned about the company's underlying health and ability to endure future loan losses, the government converted $25 billion of its preferred-stock stake in the company into common stock over the summer. That effectively gave U.S. taxpayers a 34% stake in one of the world's largest financial institutions.

-- CNNMoney.com staff reporter David Ellis contributed to this report. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.32%4.27%
15 yr fixed3.29%3.27%
5/1 ARM3.34%3.47%
30 yr refi4.29%4.24%
15 yr refi3.26%3.25%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,960.57 -123.23 -0.72%
Nasdaq 4,449.56 -22.54 -0.50%
S&P 500 1,978.34 -9.64 -0.48%
Treasuries 2.47 -0.04 -1.59%
Data as of 2:04pm ET
Company Price Change % Change
Facebook Inc 75.19 0.21 0.28%
Apple Inc 97.67 0.64 0.66%
Bank of America Corp... 15.59 -0.03 -0.19%
Ford Motor Co 17.62 -0.22 -1.23%
Applied Materials In... 21.23 -0.52 -2.41%
Data as of Jul 25

Sections

The rideshare app will launch in New York on Friday evening, as the city's taxi commission comes to terms with the technology. More

Americans with disabilities face huge financial hurdles and it starts early on, according to a recent report. More

Louisiana is now the top location for motion picture filming, supporting thousands of new jobs and small businesses. More

Americans with disabilities face huge financial hurdles and it starts early on, according to a recent report. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.