Treasury Announces Start Of Sale Of $2.2 Billion In Trust Preferred Shares Of Citigroup

[Purveyor]

By Martin Crutsinger

WASHINGTON (AP) - The government said Wednesday it is starting to sell $2.2 billion in trust preferred shares that it holds in Citigroup, another move to recoup the costs incurred in the $700 billion financial bailout.

The Treasury Department said the pace of the sales would be determined by market conditions.

The $2.2 billion in trust preferred shares were received by the government as part of Treasury's agreement in January 2009 to share potential losses on a pool of $301 billion of assets held by Citigroup.

The loss-sharing arrangement also involved the Federal Deposit Insurance Co. and the Federal Reserve. Citigroup paid the Treasury and the FDIC a premium in the form of securities for their willingness to share potential losses over a five to 10-year period.

The loss sharing arrangement was terminated in December 2009 at the request of Citigroup. Treasury was never required to make any payments under the arrangement and has no further obligation to do so.

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