Citigroup Bailout-Warrant Trading Suspended by NYSE After Plunge

  • NYSE will apply to SEC to delist Citigroup B Warrants
  • Warrants were auctioned by U.S. in 2011 for 26 cents apiece

The New York Stock Exchange suspended trading of some warrants tied to Citigroup Inc.’s bailout after the value of the contracts plunged.

The exchange acted because the B warrants have “fallen below the NYSE’s continued listing standard requiring the security to maintain an aggregate market value of shares outstanding not less than $1 million,” according to a statement Monday. “NYSE will apply to the Securities and Exchange Commission to delist the warrants pending completion of all applicable procedures, including any appeal by the company of the NYSE regulation staff’s decision.”

Citigroup B warrants closed today at 0.2 cents apiece, compared with about 6.2 cents at the end of 2013. The contracts allow investors to buy Citigroup stock at $178.50 by Oct. 28, 2018. The shares haven’t traded that high since 2008, adjusted for a reverse split in 2011. The New York-based lender closed Monday at $54.40 and is little changed this year.

The Treasury obtained warrants in banks so that taxpayers could profit from recoveries at companies that were bolstered by the government’s Troubled Asset Relief Program. The U.S. auctioned the B warrants for 26 cents apiece in January 2011. Citigroup A warrants, which allow investors to buy the stock for $106.10 by January 2019, were auctioned at $1.01 a piece and now trade for 32 cents. The combined sales raised about $312 million.

Kamran Mumtaz, a spokesman for Citigroup, declined to comment.

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