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Citi Buying Remaining SIV Assets For $17B
Citi dubbed the transaction “nearly cashless,” and said it will be repaid $6.5 billion it has spent to support the SIVs.
November 19, 2008
The cleanup at Citigroup continues.
Having unveiled plans earlier this week to shed a sizable chunk of its workforce, Citi Wednesday said it is buying up the last $17.4 billion of assets in its structured investment vehicles.
Citi dubbed the transaction “nearly cashless,” and said it will be repaid $6.5 billion it has spent to support the SIVs. Citi said the SIVs have been unloading assets to fund maturing debt obligations and have reduced long-term assets from $87 billion at the end of July 2007 to the current $17 billion.
As of Sept. 30, the SIVs had an estimated fair value of $21.5 billion, with the $4 billion difference attributed to assets sales and maturities, as well as a decline in market value.
The bank said the SIVs will have sufficient funds to repay maturing senior debt obligations, and Citi's funding requirement at closing is estimated at $300 million.
On Monday, Citi said it was looking to sharply reduce it headcount, further cut costs and said it planned to unload more assets.
Shares of Citi were off another 8% at midday, at $7.67.
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