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How close is Wachovia to becoming the next WM?
- Thread starter axehawk
- Start date
It was down so much because the NY Times article mentioned Treasury involvement in the Citigroup acquisition. Therefore it was easy to conclude that there would be a deal sooner rather than later
Quote from The Kin:
Anyone know why WB is down so much given the bailout is here. Could it be a buy?
I dunno until we read the details but so far it doesn't look like there is any money being offered to shareholders, they did mention bondholders:Quote from Toonces:
OK so it's still going to zero.
09/29/2008 08:20 *DJ Citi To Assume Wachovia Senior, Subordinated Debt
Citigroup Inc. To Acquire Banking Operations Of Wachovia
Last update: 9/29/2008 8:28:39 AM
DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The Federal Deposit Insurance Corp. on Monday announced that Citigroup Inc. (C) will acquire the banking operations of Wachovia Corp. (WB). The FDIC said the deal was reached in concurrence with it, the Federal Reserve Board and the U.S. Treasury Department. "There will be no interruption in services and bank customers should expect business as usual," FDIC Chairwoman Sheila Bair said. "On the whole, the commercial banking system in the U.S. remains well capitalized," Bair said. "This morning's decision was made under extraordinary circumstances with significant consultation among the regulators and Treasury." Citigroup will acquire most of Wachovia's assets and liabilities, the FDIC said, including five depository institutions and senior and subordinated debt issued by Wachovia. Wachovia will continue to own AG Edwards and Evergreen, the agency added. The agreement means Citigroup will absorb $42 billion in Wachovia losses on a $312 billion pool of loans. The FDIC said it will absorb any losses that go beyond that figure. Wachovia shares plummeted steadily in premarket activity, off 82% to $1.85 recently. Citigroup was up 1.8% to $20.50.
This looks very interesting to me:
"Citigroup has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing the risk, according to the press release."
Has this been done before?
"Citigroup has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing the risk, according to the press release."
Has this been done before?