Citicorp will proceed with an offering of $650 million in convertible preferred stock, although reports of problems at its mortgage unit may make the sale more difficult.

On Aug. 7, Citicorp filed with the Securities and Exchange Commission to issue 32.5 million shares of preferred equity redemption cumulative stock, known as Percs, through Morgan Stanley & Co. The offering is a key element in Citicorp's long effort to rebuild capital.

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