US Treasury to sell last of Citigroup’s securities for $894 mn

The US Treasury yesterday said it was selling the last of its securities in banking giant Citigroup for around $894 million, ending a sorry chapter in the bank's bailout saga during the global financial crisis in 2008.

The subordinated notes were issued to the Treasury in exchange for Citigroup securities previously held by the Federal Deposit Insurance Corporation (FIDC). 

Those original Citigroup securities were issued to the FDIC in 2009 as part for the government's historic bailout under the TARP Asset Guarantee Program (AGP).

The FDIC transferred those securities to Treasury late last year, which the Treasury yesterday exchanged for subordinated notes ''in order to maximise proceeds on the disposition.''

Including the expected proceeds from yesterday's sale, the Treasury said that it received more than $58.4 billion in repayments and other income on its TARP investment of $45 billion in Citigroup – representing an overall positive return for taxpayers of more than $13.4 billion.

"Today's transaction is part of our continuing efforts to wind down TARP's bank investment programs, which helped stabilise our economy during a severe financial panic and delivered a profit for taxpayers," said Tim Massad, assistant secretary for Financial Stability.