Citigroup Inc. said nearly all the publicly held preferred and trust-preferred securities outstanding have been tendered to its exchange offer, which will give the federal government a one-third stake in the company.

About $20.3 billion, or 99%, of the securities in question were tendered. The government is matching up to $12.5 billion of the securities' value in the public exchange offering.

Citigroup is still in turmoil from its mortgage-related securities and the credit crisis. Investors had started to believe the worst was over as losses narrowed last year and the company in the first quarter earned its first profit in 18 months.

But the trouble at Citigroup, which was a leader in creating and marketing some of the exotic securities that were at the heart of the credit crunch, appears to be far from over.

The company was directed by the government in May to raise $5.5 billion in capital.

Citi said the exchange offer should help it boost tangible common equity by about $60 billion.

It said it accepted all of the securities tendered and will issue 5.83 billion common shares to the participants, diluting its shares outstanding by about half.

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