Citi to Repay $20 Billion of Bailout Funds

Citigroup (C), recipient of the biggest U.S. bank bailout, struck a deal with regulators to repay $20 billion to taxpayers and escape government-imposed pay restrictions.

Citigroup, the only major U.S. lender still dependent on what the government calls "exceptional financial assistance," will raise the funds with a sale of $20.5 billion of equity and debt. The New York-based company also plans to substitute "substantial common stock" for cash compensation, the bank said in a statement today.

Chief Executive Officer Vikram Pandit has pressed for an exit from the Troubled Asset Relief Program out of concern that TARP's pay constraints make Citigroup vulnerable to employee poaching by Wall Street rivals. Bank of America Corp., the biggest U.S. bank, exited the program last week after paying back $45 billion of rescue funds.

Read Full Article from BusinessWeek

- Posted: 2009-12-14 16:09:55

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