Citigroup Reaches Aid Deal With U.S. Government

Updated from 11:32 a.m. EST

Citigroup(C Quote) and the U.S. government reached a deal in which the government will raise its stake in the embattled bank.

In a press release Friday, Citigroup said it will issue common stock in exchange for preferred securities, which the bank said will "substantially increase" its tangible common equity without any additional U.S. government investment.

CEO Vikram Pandit, on a conference call Friday morning, said that based on the company's own conservative stress tests, the plan "should take capital issues off the table even in a stressed environment." ...