Citigroup to raise $3 billion in capital through fresh stock sale

30 April 2008

Citigroup Inc, the largest bank in the US, which suffered a $15 billion net loss over the last two quarters, and reported more than $45 billion of write-downs and credit losses since 30 June last year, plans to raise $3 billion through sale of common stock.

Citigroup said it had received "strong" interest in the public offer. The company may increase the issue size depending on the market response, chief financial officer Gary Crittenden said in a statement.

Citigroup has so far raised more than $36 billion in capital, including last week's sale of $6 billion of preferred stock, since late 2007.

The bank also sold $12 billion in leveraged loan portfolio this month to private equity investors to raise funds.

Citigroup stock has risen 46 per cent from a low of $18 on 17 March, a level not seen since October 1998, on expectations that the worst of the write-downs may have passed.

The offer, the first in Citigroup's recent capital-raising to involve common stock, is expected to dilute promoter holding in the bank, said an analyst, adding, it is a better option than paying a high premium in a preferential issue .