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It was widely reported, in the Fall of 2007, that Citigroup was “among banks that have suffered in the housing crisis as values have fallen and mortgages have gone unpaid.”
Indeed in the first Quarter of 2008, Citigroup announced that the bank, which lost $5.1 billion in the first quarter and wrote down $12 billion in securities tied to debt, and that the Company expected an additional “$45 billion of losses and write-downs as a slowing economy hurts its customers’ ability to pay back everything from corporate loans to subprime mortgages.”
Citigroup issued these preferred shares “to shore up its balance sheet after the largest U.S. bank recorded over $16 billion in write-downs and credit losses in the first quarter, thereby bringing Citigroup’s “total of capital raised since November to more than $36 billion to help offset more than $45 billion of losses and write-downs.”
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