US to Guarantee Over $300 Billion in Citigroup Assets

The U.S. government has agreed to guarantee over $300 billion of Citigroup's troubled assets -- loans and securities backed by residential and commercial real estate and other such assets -- with conditions attached. These conditions are being hammered out.

In a late-night announcement after a weekend of talks about what to do to help Citi, the Treasury also said it and the FDIC will provide protection against losses in a pool of about $306-billion worth of loans and securities on Citigroup's balance sheet. The Treasury said the U.S. Federal Reserve stood ready to backstop any additional risk in the asset pool through an offer of a non-recourse loan.

"With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy",  the Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation said in a joint statement.

No Plans For Federal Takeover Of Citi

The government officials decided against taking over Citigroup in the way it took control of AIG by lending the firm massive amounts of money and in return assuming a huge equity position.

Government officials fear taking over Citigroup would create a precedent: Unlike AIG, Citigroup's balance sheet is relatively healthy, with relatively strong levels of capital particularly compared to most of its competitors.

Still, officials from the Treasury and Citigroup are unsure what it would take to restore confidence in the company, including a possible smaller capital injection or some sort of statement that Citigroup is financially sound.

For that reason, Citigroup officials are continuing to explore possible merger possibilities and a spin off of some of Citigroup's businesses, even as CEO Vikram Pandit publicly stated the sale of the firm's massive and coveted broker business, Smith Barney is off the table, these people say.

Both officials at Citigroup and in the government concede the situation facing Citigroup is daunting. Because of Citigroup's size and scope—it operates in just about every country and competes in just about every financial business, the company's survival is a national concern.

Citigroup has spent the past week telling investors that its capital position is strong, but investors have lost confidence in the current management led by CEO Vikram Pandit who has been in the job less than a year, and the firm's board, which appeared to ignore widespread calls by analysts to integrate the firms operations and slash its massive workforce until recently.

Meanwhile, various merger possibilities seem slim. A deal with investment banks Morgan Stanley or Goldman Sachs would create massive overlap and would lead to huge layoffs. There aren't many banks with a strong deposit base that Citigroup can buy with its depressed stock price.

(Watch the full Charlie Gasparino Citigroup report on the left)

Pandit, for his part, has cut the workforce to 350,000 from 375,000 and just announced another 50,000-job cut by early 2009. But for investors, those moves were too little too late. Just a year ago, Citigroup's share traded at around $50.

Citigroup's shares fell 60 percent last week to $3.77 amid concerns about the bank's loan exposure amid a recession hurting many economies globally. Citi shares failed to rebound on Friday, even as the Dow Jones Industrial Average of large company stocks spiked nearly 500 points on the news that President-elect Barack Obama will name NY Fed President Tim Geithner as his new Treasury Secretary.

Because Citigroup is a bank it has access the the Federal Reserves discount window, and because of its size, there is virtually no possibility of the bank failing and filing for bankruptcy as investment bank Lehman Brothers did. "Citigroup is too big to fail; the government wont allow that because the firm is involves in so many business both institutional and consumer around the world," said one bond trader with detailed knowledge of Citigroup's operations.

Sumber : www.cnbc.com

BEI: Saham Publik di Bank Century Tidak Hangus

Jakarta - Otoritas Bursa Efek Indonesia (BEI) menjamin saham milik publik di PT Bank Century Tbk (BCIC) tidak akan hangus terkait pengambilalihan bank itu oleh Lembaga Penjamin Simpanan. Saham publik akan diproteksi.

"Nggak hangus, mana bisa hangus. Nanti kita tunggu laporan dari LPS, kan tidak mungkin LPS ambil alih 100%. Saham publik kan tidak bisa dihilangkan," kata Direktur Perdagangan dan Litbang BEI MS Sembiring di gedung BEI, Jakarta, Senin (24/11/2008).

Sembiring menilai adanya kecemasan saham publik di Bank Century akan hangus karena munculnya informasi yang tidak benar. "Saya kira ini cuma persepsi saja yang menyebabkan munculnya informasi saham publik akan hilang," tukasnya.

Jika pemegang saham lama akan ikut menambah modal, menurut Sembiring, maka itu dilakukan oleh pemegang saham utama melalui penyertaan modal sementara maksimal 25% dari dana modal untuk penyelamatan.

"Pemegang saham lama bisa ikut melakukan normalisasi Bank Century, tidak mungkin pemegang saham publik yang dikorbankan. Saham publik pasti akan diproteksi," jelas Sembiring.

Saat ini investor publik tidak bisa melakukan transaksi saham Bank Century karena sahamnya disuspensi sejak Jumat 21 November 2008. Harga terakhir saham Bank Century ada di level Rp 50 per saham.

Pemegang saham Bank Century per 30 September 2008 adalah:

Clearstream Banking S.A Luxembourg 11,5%
First Gulf Asia Holdings Limited (d/h Chinkara Capital Limited) 9,55%
PT Century Mega Investindo 9%
PT Antaboga Delta Sekuritas 7,44%
PT Century Super Investindo 5,64%
Lain-lain kurang dari 5% sebesar 57,21%.