Citibank Gets Multi-Nationalized

Despite Citibank's massive problems, one reason it has not been "nationalized" is because it is an enormous multi-national bank. So the Treasury Department seems to found a creative solution: to "multi-nationalize" Citibank by partnering the U.S. government with the governments of Singapore and Saudi Arabia.

[T]he [U.S] government will increase its stake in the company to 36 percent from 8 percent.
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Under the deal, Citibank said that it would offer to exchange common stock for up to $27.5 billion of its existing preferred securities and trust preferred securities at a conversion price of $3.25 a share, a 32 percent premium over Thursday’s closing price.

The government will match this exchange up to a maximum of $25 billion of its preferred stock at the same price. In its statement, the Treasury Department said the dollar-for-dollar match was intended to strengthen Citigroup’s capital base.

The Government of Singapore Investment Corporation, Saudi Prince Walid bin Talal, Capital Research Global Investors and Capital World Investors have already agreed to participate in the exchange, Citibank said in a statement. Existing shareholders will own about 26 percent of the outstanding shares.