US, Citigroup reach $25 bn deal: Source

Written by Reuters | Washington | Updated: Feb 27 2009, 16:22pm hrs
The US government and Citigroup have reached a deal to convert up to $25 billion in government-held preferred shares in the bank to common equity, a person familiar with the transaction said early on Friday.

Under the deal to bolster the bank's capital base, Citigroup will receive no new government funds and must find private investors willing to convert their preferred stock to common shares, the person said.

The government will match the private conversions dollar-for-dollar up to $25 billion.