Ministry of Propanda: Yes, Citicorp is acquiring Wachovia's toxic assets, but it's not a failure

[marmar]

from MarketWatch:



Citi to acquire Wachovia's banking operations

By John Spence, MarketWatch


BOSTON (MarketWatch) -- Wachovia Corp. became the latest financial-services giant to succumb to the global credit crunch when regulators announced Monday the company's banking operations were being bought by Citigroup Inc.

Citigroup will acquire the banking operations of Wachovia, the troubled Charlotte, N.C.-based bank, according to a press release from the Federal Deposit Insurance Corp. on Monday morning.

Citi will acquire "the bulk of Wachovia's assets and liabilities," the FDIC statement said. Under the agreement, Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans, while the FDIC will take losses beyond that.

Citi has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing the risk, according to the press release.

Wachovia, one of the nation's largest banks, was in negotiations to sell itself over the weekend, with media reports naming Wells Fargo & Co. and Citigroup as the most likely buyers. Reports also mentioned Banco Santander as a potential merger partner. Read related MarketWatch First Take commentary.

Federal regulators on Sunday evening were pushing for the sale of Wachovia, but the government was opposing demands to provide financial guarantees to the buyer, the New York Times reported. ..........(more)

The complete piece is at: http://www.marketwatch.com/news/story/citigroup-acquire-wachovias-banking-operations/story.aspx?guid=%7B633CD0D5%2D5FFA%2D42B8%2DBBF3%2D0E6402BEE599%7D

[livelongandprosper]

1. Somehow this whole thing reminds me of the vacuum cleaner

in Yellow Submarine

Sea of Monsters - where the dreaded "vacuum cleaner" beast sucks up the entire landscape and then itself

http://en.wikipedia.org/wiki/Yellow_Submarine_(film)