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NEW YORK CITY-According to the Wall Street Journal, Citigroup, Inc. has worked out a deal with the Treasury Department to cast off the weights of the Troubled Asset Relief Program. Something that Citi has been seeking for a while, since companies like Bank of America, had paid paid their debts and been released from government intervention.

Citi will raise $20.5 billion by issuing common stock. In addition, some cash promised to employees will be replaced by $1.7 billion in stock. Meanwhile, the Treasury will sell up to $5 billion of the common stock in a separate offering and will divest itself of the 34% interest in Citi, through an orderly manner over the next six months to a year.

The government’s terms for exiting TARP have been individualistic, to say the least, and Citi’s departure requires them to replace their $20 billion of TARP funds with new capital.

In a statement, the Treasury said, “Treasury has repeatedly stated that the United States never intended to be a long-term shareholder in private companies. As banks replace Treasury investments with private capital, confidence in the financial system increases, government’s unprecedented involvement in the private sector diminishes, and taxpayers are made whole.”

To read the entire Journal article, click here.

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