{"id":198251,"date":"2007-11-27T19:57:00","date_gmt":"2007-11-28T00:57:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2007\/11\/27\/arabs-bail-out-citigroup-again\/"},"modified":"2007-11-27T19:57:00","modified_gmt":"2007-11-28T00:57:00","slug":"arabs-bail-out-citigroup-again","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2007\/11\/27\/arabs-bail-out-citigroup-again\/","title":{"rendered":"Arabs Bail Out Citigroup&#8230;AGAIN!!!!"},"content":{"rendered":"<p>In 2001, Saudi Prince Alwaleed bin Talal rescued Citigroup, and this time, <a href=\"http:\/\/online.wsj.com\/article\/SB119613039399104832.html\">it&#8217;s the Abu Dhabi Investment Authority<\/a>.<\/p>\n<p>BTW, look at the terms:<\/p>\n<ul>\n<li>They get a 4.9% stake.<\/li>\n<li>In exchange for its investment, ADIA will receive convertible stock in Citigroup yielding 11% annually. (They are making the loan at 11%, when junk bonds get 9%, <span style=\"font-weight: bold;\">WTF<\/span>????)<\/li>\n<li>The shares are &#8220;required to be converted into common stock at a conversion price of between $31.83 and $37.24 a share over a period of time between March 2010 and September 2011.&#8221; (It&#8217;s currently trading at $29.75, the lowest since 2002, so this means that the conversion essentially means that they are very nearly paying for this investment)<\/li>\n<li>This gives them a bigger stake in the firm than Saudi Prince Alwaleed bin Talal. (remember him?)<\/li>\n<\/ul>\n<p>If this company isn&#8217;t functionally insolvent, then its management needs to go to be fired, and criminally investigated, because the only way a non-insolvent company takes a deal <span style=\"font-weight: bold;\">this<\/span> bad is if someone is breaking the law.<\/p>\n<blockquote style=\"color: rgb(0, 0, 153);\"><p>Investors have increasingly expressed concerns about Citigroup&#8217;s &#8220;tier 1&#8221; capital levels &#8212; a common measure of a bank&#8217;s capital adequacy &#8212; which for the first time in years fell below its 7.5% target in the third quarter. Although the bank is still considered to be well capitalized, investors worried that Citigroup would be forced to cut its dividend.<\/p><\/blockquote>\n<p>H\/T <a href=\"http:\/\/matthewyglesias.theatlantic.com\/archives\/2007\/11\/the_iranian_line.php\">The Big Picture<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In 2001, Saudi Prince Alwaleed bin Talal rescued Citigroup, and this time, it&#8217;s the Abu Dhabi Investment Authority. BTW, look at the terms: They get a 4.9% stake. In exchange for its investment, ADIA will receive convertible stock in Citigroup yielding 11% annually. (They are making the loan at 11%, when junk bonds get 9%, &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1261,970,973,1265],"tags":[],"class_list":["post-198251","post","type-post","status-publish","format-standard","hentry","category-bubble","category-corruption","category-economy","category-housing-crash"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/198251"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=198251"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/198251\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=198251"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=198251"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=198251"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}