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.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.36%||4.24%|
|15 yr fixed||3.39%||3.26%|
|30 yr refi||4.34%||4.22%|
|15 yr refi||3.38%||3.24%|
Today's featured rates:
General Mills has scrapped a controversial change to its fine print that some read as eliminating customers' right to sue the company. More
Office for iPad move is a symbolic victory for Nadella's Microsoft, but the company is still weighed down by many of the same old issues. More
Getting people to donate money is a big business, and some universities, hospitals and other nonprofits are rewarding their top fundraisers with as much as $1 million to bring in the big bucks. More