New York In order to complete the wind-down of the Citi-advised Structured Investment Vehicles ("SIVs"), Citi announced today that, in a nearly cashless transaction, it has committed to acquire the remaining assets of the SIVs at their current fair value, estimated to be approximately $17.4 billion, net of cash, as compared to $21.5 billion at September 30, 2008. The decline primarily reflects asset sales and maturities of $3.0 billion and a decline in market value of $1.1 billion since the end of the third quarter 2008.
Citi will record these assets as Available for Sale. As a result of the transaction, Citi's GAAP assets will be reduced by approximately $6 billion and risk-weighted assets will be increased by approximately $2 billion.
The SIVs have been selling assets as part of an orderly asset-reduction plan to fund maturing debt obligations on a timely basis, and have reduced long-term assets from $87 billion at the end of July 2007 to $17 billion currently.
As previously disclosed, Citi has been providing financial support to the SIVs. The current fair value of such support is $6.5 billion and is expected to be repaid upon completion of the transaction. This transaction will result in the SIVs' having sufficient funds to repay maturing senior debt obligations. Citi's net incremental funding requirement at closing is estimated at $300 million.
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Citi Smith Barney, Banamex and Nikko. Additional information may be found at www.citigroup.com or www.citi.com.