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Citigroup Drop to $3.9; GIC LOST Billions!!!

makapaaa

Alfrescian (Inf)
Asset
#1


http://sgpropertypress.wordpress.com/2008/01/16/gic-buys-a-slice-of-embattled-citigroup/

The US$6.88b investment, with limited downside, makes it potentially one of the global bank’s largest shareholders​

(SINGAPORE) It’s two giant purchases in as many months.
The Government of Singapore Investment Corp (GIC) is investing US$6.88 billion in Citigroup through a private offering of convertible preferred securities, it said yesterday. The downside is limited as the securities yield an annual coupon of 7 per cent until conversion. The upside - if Citigroup’s currently battered share price picks up - can be fairly attractive.
If converted to shares, the securities will bring GIC’s holdings in the global bank to some 4 per cent of its enlarged share capital. That would make GIC - which currently owns just 0.3 per cent of Citigroup, a stake built up slowly over the past 25 years - one of the bank’s largest individual shareholders.
The investment is part of a broader capital-raising exercise by Citi - which also reported a US$9.83 billion loss for the fourth quarter and further sub-prime- related writedowns of US$18.1 billion yesterday - to bring its capital ratio back in line with company targets.
Besides lowering its dividend and selling non-core assets, Citi is also seeking to raise at least US$14.5 billion from public and private investors - including GIC.
The private offering is worth US$12.5 billion and consists entirely of convertible preferred securities.
While GIC will take the largest portion, other investors include existing shareholders the Capital Group and Saudi Arabia’s Prince Alwaleed bin Talal.
The Kuwait Investment Authority, the New Jersey Division of Investment, and former Citi chief executive Sanford Weill and The Weill Family Foundation are also buying into the private offering. They will get the same terms as GIC.
Convertible preferred securities, also called perpetual convertibles, are structured to protect an investor from downside risk while giving a chance to participate on the upside.
To protect against downside if Citi’s share price falls further, the securities yield an annual coupon of 7 per cent, payable quarterly.​

To participate on the upside, GIC may convert the securities at any time, although it must do so at a 20 per cent premium above a reference price. This will be set based on the average trading price of Citi shares over the next few days.
The securities have a perpetual maturity, which means they do not expire; however, Citi can call the securities - pay back the money - after the seventh year. Citi may also force conversion after five years, if its stock price exceeds 130 per cent of the reference price.
The terms also include ‘customary standstill provisions’ that cap GIC and others’ ownership in Citi and restrict them from seeking to influence management.
GIC will not be taking a seat on Citigroup’s board, it said in a statement.
Its deputy chairman and executive director Tony Tan said the bank is ‘one of the largest banks in the world with an attractive global franchise’ and ‘an excellent addition to GIC’s portfolio’. Citi has some 200 million customer accounts and does business in more than 100 countries.
GIC has confidence in Citi’s board of directors, headed by Winfried Bischoff, and the new management team headed by Vikram Pandit, Dr Tan said. He added that GIC also believes Citi has taken ‘decisive action’ to further strengthen the balance sheet and profitability of the bank, and that the nature of the convertible preferred securities ‘gives appropriate downside protection’.
Citi’s Mr Pandit said he has known GIC’s principals for years and is delighted that the ‘widely respected, long-term oriented financial investor’, and ‘other important investors’, have decided to buy in.
The offering is the second time since the subprime crisis hit last August that Citi has tapped sovereign capital. In November, it sold US$7.5 billion worth of mandatory convertible notes to the Abu Dhabi Investment Authority, which would convert to a nearly 5 per cent stake.
The bank’s share price has nearly halved in recent months, falling from over US$55 as of May last year to about US $29 at Monday’s close.
Its fourth-quarter net loss compares to a profit of US$5.1 billion a year ago, while its sub-prime writedowns are the largest announced by any bank thus far.
Market observer Terence Wong, chief investment analyst at SIAS Research in Singapore, said he was not surprised by GIC’s purchase. ‘I believe they are aggressively looking and have taken it as a great opportunity,’ he said.
‘If they don’t take it, other SWFs or investors will jump at the chance. It may not be the lowest price, but GIC is a long-term investor and it’s difficult to catch it right at the trough,’ said Mr Wong.
Just over a month ago, GIC said it was investing over $14 billion in UBS’ mandatory convertible notes, which if converted would give GIC a 9 per cent stake in the Swiss wealth management giant.

Source: Business Times 16 Jan 08​
 

halsey02

Alfrescian (Inf)
Asset
#3
http://www.youtube.com/watch?v=7iArJm9gBvg

don't worry. we'll make all the billions back in no time. i say let us all together: kowtow, repent, apologise and kneel down and pay homage to our great leaders. amen.

well done! congratulations!!! it's time to celebrate the Christmas!!!
Apologise for what?, they should apolize for giving me more good years, assets enhancement & living in a golden period.

It is now King Midas in reverse, everything they touch, turn to dust!, and they blame the world economy?

Never had candidly admit that, they make mistakes. They should kowtow, to the people, knee down & apologise!.

At least, we can feel the pain together in a lesser degree!...we can suffer togther!

:mad:
 

halsey02

Alfrescian (Inf)
Asset
#4
Monitoring "C" shares, was tempted to move in at around $5.00, looks like have to wait and do the 'limbo rock thing, HOW LOW CAN IT GETS!..

WHo knows get lucky like Mr.Ooi, buy chunks of "C" at $2.30 & latter sell it at $15... ha ha ha..LONG TERM INVESTMENT!
 
#5
That is a 88.18percent loss if it is from the mandatory 33USD. That means for every 100 million shares bought, that is a 2.91 billion USD loss.That is enough money to 2 million Singaporeans USD1,455 dollars for their CPF S account or 7.3 times the current retraining budget of 600 million. Our goondu MPs cannot even count this right?
 
#7
Cestbon, please give a breakdown of the paper loss likely to become totally loss. Do not understimate paper loss, it can real wealth loss, even if the company has going concern. Some stocks started with 251USD never went past 10USD every since.
 

halsey02

Alfrescian (Inf)
Asset
#8
Cestbon, please give a breakdown of the paper loss likely to become totally loss. Do not understimate paper loss, it can real wealth loss, even if the company has going concern. Some stocks started with 251USD never went past 10USD every since.
At $5 a share & below or even below $6 a good bye? erm! I mean a good buy!:wink:
 

Tailok

Alfrescian
Loyal
#9
This is how the Sillipore gahmen works. Lose Billions $$$$ just kept quiet. Earn a few $$$$$ then make a big hooooo haaaa. sigh....:mad:
 
#10
Remember when you go to election polls. Telll all your friends. Do you want to vote an LKY party if his grandsons run road? One to USA one to Singapore American School?
 
#11
That is a 88.18percent loss if it is from the mandatory 33USD. That means for every 100 million shares bought, that is a 2.91 billion USD loss.That is enough money to 2 million Singaporeans USD1,455 dollars for their CPF S account or 7.3 times the current retraining budget of 600 million. Our goondu MPs cannot even count this right?

Err.....guys, we may be jumping the gun. Temasick may not have converted the bonds....

Check CNBC site on the top 10 institutional holders of Citi....No Temasick there listed. If converted, should give them at least 202m shares which would give them 4+%.

Don't pop the champagne yet.

But Ho Ching is still a fucked type investor.

Long term has become Wrong Term.
 

halsey02

Alfrescian (Inf)
Asset
#13
Err.....guys, we may be jumping the gun. Temasick may not have converted the bonds....

Check CNBC site on the top 10 institutional holders of Citi....No Temasick there listed. If converted, should give them at least 202m shares which would give them 4+%.

Don't pop the champagne yet.

But Ho Ching is still a fucked type investor.

Long term has become Wrong Term.
Didn't the 'tancho hair' man said, LONG TERM! LONG TERM!..can't help it, it is world's economy going bad!. But then again, on the reverse side, boom, they will do a great opear on how clever we are!!!:wink:
 
#14
Err.....guys, we may be jumping the gun. Temasick may not have converted the bonds....

Check CNBC site on the top 10 institutional holders of Citi....No Temasick there listed. If converted, should give them at least 202m shares which would give them 4+%.

Don't pop the champagne yet.

But Ho Ching is still a fucked type investor.

Long term has become Wrong Term.
So I can pop champagne to the tune of 5 billion USD, or about 8 billion SD?
It does not matter any more. All trust has been irreparably lost with all their shits. People who want to work for them for real conviction and with ability, they ignore. They hire losers who are morally bankrupt to fuck things up. Sorry, this is just world class shit.
 
#18
According to my business advisor based in NY, Citi may go under.

Indian CEO Pandit will be asked to step down soon.
The fucking indian was set up to be punked. USA is very racist and white supremist. This Citibank affair was a white house crafted affair to clean up the pyramid trading going on for years. It is a carthasis where all debts to all foreign players get absolved - wealth destruction. Americans play to win. Everyone else gets fucked.
 
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