According to the report, Citi is planning to raise the funds in an effort to repay US$20 billion of bailout funds.
Attributing to people close to the situation, FT said Citi was also planning to raise around US$2 billion of mandatory convertible securities. They are a new form of security that convert into equity when a bank’s capital ratio falls below a pre-determined level.
However, they said that the talks were at a delicate stage and could collapse without a deal as some among Citi’s regulators were concerned that the bank might not be strong enough to repay the funds from the troubled asset relief programme (TARP), the daily said.
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