Simpson Thacher Represents Treasury in Citigroup Preferred Stock Exchange
03.02.09
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Simpson Thacher is representing the US Treasury Department in connection with its agreement to exchange up to $25 billion of Citigroup preferred stock it currently holds for shares of Citigroup common stock. Upon completion of this exchange, the remaining $27 billion of Citigroup preferred stock held by the US Treasury and the FDIC would be exchanged for Citigroup trust preferred securities. These exchanges are part of a series of proposed exchange offers by Citigroup that would result in up to approximately $52.5 billion of its outstanding preferred stock and trust preferred securities being converted into common stock, thereby increasing Citigroup's tangible common equity (one of the key measures of financial strength) to as much as $81 billion. If the exchange offers are subscribed in full, the US Treasury will own approximately 36 percent of Citigroup's outstanding common stock and be its largest common stockholder.
The Simpson Thacher team included Lee Meyerson, Elizabeth Cooper, Shalini Aggarwal, Anthony Vernace, Ryan Gavin, Markus Lotz, Brandon Messina and Brian Korchin (M&A); Tristan Brown, Michael Richman, Beth Understahl, Paula Han, Eric Sarabia and Grace Lin (Executive Compensation & Employee Benefits); and Marcy Geller (Tax).