tut666

When Preferreds Aren't Preferred

I agree, for a %5 haircut they lowered confidence in whole pfd market. If they change it (and it would be a nominal dollar change) the market for these shares would rally huge and banks would have an avenue to raise capital which is what they want. Somebody call Geitner! P.S the Trus preferreds are way undervalued in teh whole banking system but especially so in C case. They obviously recognized that 3.25 per share times 7.307 was less than what trust preferreds would have had to get which is why they only took the lesser ones. Huge opportunity to buy them for great yield with now increased equity value below them in equity structure. Where elae can you get almost a govt. too big to fail guarantee with 20% yield.The worst case is you would get a better swap then the non trust prefferreds.

Why Citi Common Shares Crashed, And Why Common Preferred May Be Problematic Too

7.307 shares per preffered.

Why Citi Common Shares Crashed, And Why Common Preferred May Be Problematic Too

I believe you are correct.


On Mar 01 09:12 AM Brian Grad wrote:

> I and several others calculated 86% of par based on 21billions shares
> outstanding which jibes with your number. This implies 13.23 shares
> for $50 par and half that for $25 par on the public preferreds. There
> was about a $4 arb spread in the 6.6% "T" series at the end of trading
> on Friday. As soon as the ratios are confirmed this will collapse
> to the cost of carry. We should know sometime next week.

Why Citi Common Shares Crashed, And Why Common Preferred May Be Problematic Too

Call Christian Guzman at Citi capital markets desk. 212 723 7450. He will confirm public preferreds will be converted at a ratio that is a very modest discount to par face value. So a 25 face wil get slightly under 25 divided by 3.25. Very positve for preferreds if citi common holds. C is already becoming hard to borrow so you can assume a squeeze is possible translating to further upside for preferreds...

The Long Case For Lincare Holdings

REimbursement here is ripe for change i.e much lower. They are marking up oxygen to ridiculous levels and taking advantage of govt.