Citi Selling $2 Billion in Preferred Stock - TheStreet

Citi Selling $2 Billion in Preferred Stock

The bank's latest of several stock sales comes after posting a $5.1 billion first-quarter loss.
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Citigroup

(C) - Get Report

is selling $2 billion worth of preferred stock, the latest of several recent capital raising efforts from the troubled financial titan as it shores up its balance sheet amid mounting losses.

The bank, which

lost $5.1 billion in the first quarter

and wrote down $12 billion in securities tied to debt, said in a

Securities and Exchange Commission

filing late Tuesday that it was selling 80 million shares of perpetual preferred stock for $25 a share. The offering comes after a

$3 billion offering

of common stock and an earlier $4 billion preferred offering since the bank reported results last month.

Since December, Citi has raised more than $30 billion in new capital through various transactions, most of it being convertible preferred securities.

Not including the money to be raised in the most recent offering, Citi's capital ratio had risen to approximately 8.5% from 7.7%.

Not only is Citi selling stock, but its also selling assets. Just last week, Citi and partner

State Street

(STT) - Get Report

sold its CitiStreet joint venture to ING (ING) - Get Report

as it tries desperately to pump up its balance sheet.

Citigroup will be hosting an analyst and investor meeting on Friday and presumably wants to look as solid as possible. A spokesperson for Citi declined to comment.

The bank has 18 series of junior debt outstanding with a principal amount of roughly $23.6 billion, bearing interest rates ranging from 6% to 8.3% and with maturities ranging from 2031 to 2077.

The capital raising also comes at a time when Citi is struggling with unsuccessful hedge strategies like Falcon Strategies Two B, a hedge fund marketed by Citigroup Alternative Investments. The fund lost 53% of its value in the fourth quarter of 2007, and is now down about 75% overall, resulting in an investor lawsuit over the fund.

Citi also took a $202 million writedown in the first quarter related to assets in CEO Vikram Pandit's former Old Lane hedge fund. The bank bought the fund for $800 million.

Citi is not alone among banks that have suffered in the housing crisis as values have fallen and mortgages have gone unpaid.

Merrill Lynch

(MER)

and

UBS

(UBS) - Get Report

posted first-quarter losses tied to writedowns of mortgage-related securities.

Wachovia

(WB) - Get Report

on Tuesday increased its first-quarter net loss by 80% over what it reported three weeks ago due to further writedowns.

Even banks that finished the first quarter in the black, like

JPMorgan Chase

(JPM) - Get Report

and

Bank of America

(BAC) - Get Report

reported declining profits.

Citi shares recently were down fractionally to $25.67.