Citigroup gets Wachovia
30 September 2008Today Federal Deposit Insurance Corporation of the USA has informed that American bank Citigroup gets bank business Wachovia. In the message of department it is emphasized, that bank Wachovia is not ruined and not the bankrupt, but is only being got by other bank.
According to the terms of transaction, Citigroup gets the most part of business Wachovia, thus AG Edwards and Evergreen remain under Wachovia’s control.
Citigroup undertakes to take up losses at the rate of up to 42 billion dollars from credit portfolio of Wachovia, which total amount makes 312 billion dollars. In case if losses under the credits, which have been given in due time to Wachovia, will exceed this sum, this rest will be paid by Federal Deposit Insurance Corporation. As indemnification for risk accepted by Federal Corporation, Citigroup transfers it preference shares and warrants for the sum of 12 billion dollars
The transaction has been concluded at intermediary of Federal Deposit Insurance Corporation and Federal Reserve System (FRS) of the USA. Besides, the transaction was also coordinated with U.S. Treasure Secretary Henry Paulson and U.S. President Georges Bush.
Wachovia is the fourth on size the bank company in the USA on volume of actives and it renders various bank services on territory of 21 American states. The number of employees of the company makes 110 thousand people. Pure losses of American bank Wachovia have made 8,9 billion dollars.
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