Citi said Wednesday to launch its exchange offers for publicly held convertible and nonconvertible preferred and trust preferred securities.

Under an agreement reached in February, the U.S. government will exchange a portion of its preferred securities with an aggregate liquidation value of up to 25 billion U.S. dollars for interim securities and warrants and its remaining preferred securities for trust preferred securities.

The bank has received 45 billion dollars from the government through its Troubled Asset Relief Program, or TARP. After convert 25 billion dollars of its preferred investment in the bank to common stock, the government will have a 34 percent stake in the bank.

Assuming full participation of holders of convertible and nonconvertible public preferred and trust preferred securities in the exchange offers, Citi will convert into common shares approximately 58 billion dollars in aggregate liquidation value of preferred stock and trust preferred securities, the bank said.

The public exchange offers are currently scheduled to expire on July 24, 2009, subject to extension by Citi.

"Following completion of the exchange offers, Citi will be among the best capitalized banks in the world," said Vikram Pandit, CEO of Citi. "I'm confident that we will continue to make progress and that the strength of our franchise will be evident as the economy improves."

"After completion of the exchange offers, our Tangible Common Equity could increase by up to approximately 61 billion dollars, and our Tier 1 Common may increase by up to approximately 64 billion dollars from their respective amounts at March 31, 2009," said Ned Kelly, Citi CFO.

Source:Xinhua