Ad Hoc Capital Injections

United States: Citigroup Capital Injection, 2008

Announced: November 23, 2008

Purpose

The TIP injection aimed to foster financial stability by preventing the potential failure of a systemically important bank, in conjunction with an asset guarantee to reassure markets that Citi could absorb potentially catastrophic losses

Key Terms

  • Announcement Date
    November 23, 2008
  • Operational Date
    December 31, 2008
  • Date of Final Capital Injection
    December 31, 2008
  • End Date
    December 23, 2009
  • Source(s) of Funding
    US Treasury
  • Administrator
    US Treasury
  • Size
    $20 billion
  • Capital Characteristics
    Preferred shares (converted into trust preferred securities), warrants
  • Bail-in Terms
    No bail-in
  • Outcomes
    Between the disposition of warrants and dividend payments, the Treasury received $1.8 billion (excluding interest expense) in income from the Citi TIP investment
  • Notable Features
    The recapitalization was part of a package that also included an asset guarantee provided by the government and central bank

Key Design Decisions

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Treatment of Creditors and Equity Holders1

Capital Characteristics1

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Key Program Documents

Key Program Documents

Key Program Documents

Key Program Documents

Key Program Documents

Key Program Documents

Key Program Documents

Taxonomy

Intervention Categories:

  • Ad Hoc Capital Injections

Countries and Regions:

  • United States

Crises:

  • Global Financial Crisis