Citigroup reaches aid deal with government

[February 27, 2009]  NEW YORK (AP) -- Citigroup says it has reached a deal that will give the government up to a 40 percent stake in the struggling bank.

The company also says it recorded a goodwill impairment charge of about $9.6 billion due to deterioration in the financial markets.

The government will convert some of its preferred stock in Citi to common shares if the New York-based bank along with other private investors.

The increase in government ownership will not require additional taxpayer money. The government currently holds about an 8 percent stake in Citi.

One of the hardest hit banks by the ongoing credit crisis, Citi has already received $45 billion in cash from the government and guarantees protecting it from the bulk of losses on $300 billion of risky investments.

[Associated Press]

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