Add to balance / Manage account | User: | Log out |
Prospect News home > News index > List of issuers C > Headlines for Citigroup Inc. > News item |
Citi prices $3.5 billion three-year mandatory convertibles to yield 7.5%, up 25%
New York, Dec. 16 - Citigroup Inc. priced $3.5 billion of three-year mandatory convertibles, known as tangible equity units, at par of $100, to yield 7.5% with a 25% initial conversion premium.
The deal, priced after the close Wednesday, came at the rich end of talk for a yield of 7.5% to 8% and a conversion premium of 20% to 25%.
Citi also priced 5.4 billion common shares at $3.15 each.
The company noted that at a combined $20.5 billion the combined offering of common stock and tangible equity units is the largest public equity offering in U.S. capital markets history.
Proceeds will be used to repay $20 billion of TARP trust preferred securities and to terminate a loss-sharing agreement with the U.S. government.
The Treasury did not sell any of its shares. It had said it would sell up to $5 billion.
The tangible equity units are comprised of a prepaid stock purchase contract and a junior subordinated amortizing note. The stock purchase contract settle on Dec. 22, 2012 for between 889 million and 1.1 billion shares of Citi common stock.
The amortizing notes have a scheduled final installment payment date of Dec. 15, 2012. Citigroup has the right to defer installment payments at any time but not beyond Dec. 15, 2015.
Citigroup Global Markets Inc. was bookrunner.
The stock offering has a greenshoe for 809.5 million shares.
Citi and Morgan Stanley
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.