Citigroup To Bail Out Its Seven SIVs
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Citigroup Inc. will bail out its seven structured investment vehicles, bringing $58 billion of debt onto its balance sheet in the biggest move yet by a bank to rescue the failing funds.
Citigroup followed HSBC Holdings Plc and WestLB AG in saving the funds and averting forced asset sales. The New York-based bank said it made the decision after Moody’s Investors Service and Standard & Poor’s indicated they may cut the credit ratings of the SIVs.
The chief executive officer, Vikram Pandit, announced the decision a day after being named to the post. Moody’s said December 3 that it is preparing to cut ratings on $105 billion of SIV debt, including $64.9 billion of commercial paper and medium term notes of six managed by Citigroup.
Citigroup Inc. also announced that its former chief executive officer, Charles Prince, is stepping down. Robert Rubin, who was U.S. Treasury Secretary under President Clinton and has served as the chairman of Citigroup’s executive committee since 1999, will take over Prince’s role as chairman of the board, the New York-based bank said yesterday in a statement.
