Citigroup Inc. is more likely to cut the conversion ratio for its preferred shares now that the common stock is trading above $3.25, according to Tatyana Hube, a Bank of America Corp. analyst.

In February, Citi announced plans to exchange up to $52.5 billion of preferred shares for common stock to replenish its equity capital. Shares of the New York company closed above the planned conversion price of $3.25 on Monday for the first time since the plans were announced.

"The risk of the preferred exchange offer being repriced lower (that is, lower conversion ratios than previously indicated) has increased, in our view," Hube wrote in a report Tuesday.

A Citi spokesman did not immediately return a call for comment.

The company has not set a conversion date.

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