Citigroup Inc. on Tuesday is offering about $2 billion in $25 par 30-year trust preferred securities as part of its agreement with regulators on repaying federal bailout funds.
In December, Citigroup agreed to sell these securities to boost its capital ratios after it repaid $20 billion in trust preferred securities held by the U.S. Treasury.
The securities offered Tuesday are seen yielding around 8.875%, with much demand from institutional and retail investors, according to a person familiar with the deal.
Expected ratings on the securities are Ba1/BB-. Moody's Investors Service and Standard & Poor's had recently revised their methodologies in rating such securities given the risk of regulators forcing troubled financial institutions to skip payments to holders of these so-called hybrid securities.
