The notes were issued in exchange for Citigroup securities previously held by the Federal Deposit Insurance Corp., the Treasury said in a statement today. Those original securities were issued in 2009 to the FDIC, which transferred them to the Treasury on Dec. 28. The department exchanged the securities for subordinated notes yesterday.
The proceeds would add to taxpayer returns from the $45 billion rescue of New York-based Citigroup, which almost collapsed in 2008 amid losses tied to subprime mortgages. Including the Treasury’s expected return from the offering, the department received more than $58.4 billion in repayments and other income from the bailout, which was part of the Troubled Asset Relief Program, or TARP.
“Today’s transaction is part of our continuing efforts to wind down TARP’s bank investment programs, which helped stabilize our economy during a severe financial panic and delivered a profit for taxpayers,” Timothy Massad, the Treasury’s assistant secretary for financial stability, said in the statement.
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