NEW YORK (TheStreet) -- Citigroup's (C) desire to pay back $20 billion of remaining bailout money is being held up by the Treasury Department's refusal to sell its 34% stake in the bank, a report says.
Citigroup executives are frustrated because they can't sell stock to raise money to repay funds received under the Troubled Assets Relief Program until the Treasury signals when and how it will sell its 7.7 billion shares, people familiar with the situation told Bloomberg. And investors may be reluctant to buy shares because a Treasury sale could drive down the price, Bloomberg notes.
On Thursday, Bank of America said it sold $19.29 billion of securities as part of its plan to pay back the funds.Citigroup executives for three months have tried to persuade the Treasury Department to move ahead with a sale, the people told Bloomberg. The Treasury Department is sitting on a gain of about $6 billion from the shares it holds based on the bank's current market price, Bloomberg notes. Meg Reilly, a Treasury spokeswoman, declined to comment for the news agency on whether the government has sold any shares or when it may do so. A Citigroup spokesman said he couldn't comment. The Treasury Department hasn't told Citigroup how or when it plans to dispose of the stake, Bloomberg reports. Citigroup received $45 billion last year under TARP. In September, $25 billion of that was converted into common stock, which the Treasury can sell at any time.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV