The Treasury Department said on Wednesday it will take in $312.21 million from the sale of two groups of warrants in Citigroup Inc
The warrants to buy Citigroup shares, obtained when the government bailed out the bank during the financial crisis, were auctioned on Tuesday and both groups of warrants sold above the minimum bid price.
Treasury pumped a total of $45 billion into Citigroup under the Troubled Asset Relief Program (TARP) over 2008 and 2009. It said it has now recovered all of that plus about $12.3 billion in profits from dividends, interest and gains on the sale of Citigroup common stock, warrants and other securities.
Citigroup has spent the past year recovering from the massive losses that forced it into the government's arms during the financial crisis. The Treasury's successful auction of the warrants comes about a month after it sold off the last of its common shares in Citigroup, and a week after the bank reported its first full-year profit since 2007.
With a full year of profitability behind us, we have built a strong foundation for sustainable and responsible growth, Citigroup spokesman Jon Diat said in a press release.
Citigroup shares rose about 3 cents in early trading on Wednesday, to $4.85.
Chief Executive Vikram Pandit pledged in early 2009 to take a $1 salary until his company recovered from the financial crisis to sustained profitability. On Friday, Citigroup's board said he had achieved that goal and gave him a $1,749,999 raise for 2011.
Treasury said 255.03 million A warrants to buy common stock in Citi were priced at $1.01 each versus a minimum bid price of 60 cents, while 210.08 million B warrants went at 26 cents each against a minimum bid of 15 cents.
Closings on the warrant offerings are expected to occur on or about January 31. The warrants carry strike prices ranging from $10.61 a share to $17.85 and the new owners will have until between October 28, 2018 and January 15, 2019 to exercise them.
That means buyers can make a potential profit if Citigroup stock reaches those prices or higher before the expiry date for the warrants occurs.
Treasury's remaining interest in Citigroup consists of Trust Preferred Securities worth $800 million that are held by the Federal Deposit Insurance Corp. The FDIC is required to turn those securities over to Treasury unless it incurs any losses on Citigroup debt that had been guaranteed by the FDIC.
(Editing by Chizu Nomiyama )