The U.S. Department of the Treasury announced Thursday that it sold all of the trust preferred (TruPS) Citigroup (C) shares it held for a net profit to the taxpayer of $2.246 billion. In addition, Treasury also announced it sold 1.5 billion shares of Citigroup common stock, according to a plan announced in July, lowering its stake in the bailed out bank from 18% to 12.4%.

The closing of the preferred shares sale is expected to occur on Tuesday, Oct. 5, 2010, Treasury said, adding it did not incur any losses on the bailed-out bank's assets it guaranteed in exchange for these preferred shares.

The sale of the common shares were handled by Morgan Stanley (MS). To date, Treasury said it has sold approximately 4.1 billion shares of Citigroup common stock for gross proceeds of approximately $16.4 billion. This means that the proceeds from the latest sale were $5.9 billion, or an average of $3.93 a share, a little less than the previous average sale price of $4.03, but still a significant profit to the Treasury's purchase price of $3.25 a share. Citigroup closed at $3.91 Thursday.

Treasury invested a total of $45 billion in Citigroup under the Troubled Asset Relief Program. The government has so far recovered -- through the sale of the Citigroup preferred and common stock, together with Citigroup repayments ($20 billion at the end of last year), dividends and other distributions -- a total of $41.6 billion.

Treasury says the remaining 3.6 billion shares of Citigroup common stock it holds have a value of $14.0 billion at Thursday 's closing price. Treasury says it expects to continue selling its shares in the market in an orderly fashion, after the blackout period set by Citigroup related to its third quarter earnings release ends.

In addition, taxpayers will ultimately receive proceeds from the sale of the warrants for Citigroup common stock received under TARP, as well as the sale of up to $800 million in TruPS held by the Federal Deposit Insurance Corporation for Treasury's benefit.

On Thursday, the government also reached an agreement with AIG (AIG) on its exit plan as part of its effort to recoup some of the $700 billion it invested in bailing out the financial system.

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Linda

I thought the Obama bailout for Citimortgage was suppose to help people keep their homes. I have had to leave my home, because Citimortgage wouldn't work with me and my husband to lower our house payment. I now have an investor working with us still trying to get the payment lowered. Citimortgage has sent my account for collection with a lawyer in Atlanta. Even though for the last 7 months we have sent every single thing Citimortgage has asked for several times over to get the house payment lowered. They are telling us that there is ALOT of miscommunication at their business. What is a person to do to save their home? I will eventually sell my home, for I no longer live there, but I need the payments lowered in order to afford to keep the house at this point. Citimortgage needs to get their crap together and help people not try to screw them over.

October 06 2010 at 12:37 PM Report abuse rate up rate down Reply
Sonny

All of this money that is being recovered, has already been spent. This means that fewer treaury bonds will be sold. The house of cards will soon fall.......where will you be?

October 01 2010 at 12:06 PM Report abuse +1 rate up rate down Reply